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Oman’s CFT Regulatory Requirements: A Comprehensive Guide

The National Committee for Anti-Money Laundering and Combating the Financing of Terrorism (NAC) is responsible for ensuring the effective implementation of anti-money laundering (AML) and combating the financing of terrorism (CFT) measures in Oman. The NAC plays a crucial role in safeguarding the country’s financial system by formulating policies, fostering inter-agency collaboration, and directing strategic efforts to combat money laundering and terrorist financing.

Risk Assessment and Due Diligence

Under Royal Decree No. 30/2016, financial institutions in Oman are required to evaluate money laundering and terrorism financing risks and document them clearly. Risk factors include:

  • Customer risk
  • Countries of operation
  • Nature of products/services
  • …and more

The risk levels can vary, leading to different due diligence measures. Simplified measures are allowed under specific conditions, while enhanced measures are needed for higher-risk cases.

Customer Due Diligence

Financial institutions must maintain a risk profile for each customer, categorizing them into various risk categories:

  • Low risk
  • Normal risk
  • High risk

Customers with high ML/TF risks require enhanced due diligence, which includes:

  • Obtaining additional information
  • Updating data more frequently
  • Getting senior management’s approval

Compliance Requirements

Financial institutions in Oman must develop and implement AML/CFT policies, controls, and procedures that address:

  • Risk evaluation of customers and transactions
  • Establishment of identification and verification procedures for customers and beneficial owners
  • Creation of systems for record maintenance of customer information and transactions
  • Outlining suspicious transaction reporting

They must also appoint a senior management-level compliance officer responsible for AML/CFT obligations.

Internal Policies, Controls, and Procedures

Financial institutions should create and apply internal policies, controls, and procedures that address:

  • Risk evaluation of customers and transactions
  • Establishment of identification and verification procedures for customers and beneficial owners
  • Creation of systems for record maintenance of customer information and transactions
  • Outlining suspicious transaction reporting
  • Featuring an independent audit function
  • Implementing a senior management-level compliance officer
  • Having recruitment screening procedures to maintain high standards
  • Providing ongoing training for stakeholders about AML/CFT requirements and new developments
  • Sharing and protecting confidential information within the banking group
  • Including other arrangements as directed by the Central Bank of Oman

Reporting Requirements

Financial institutions must report suspicious transactions to the Center immediately and provide all relevant documentation. They must also respond to requests from the Center within the specified timeframe.

The compliance officer must frequently report to the Board of Directors, highlighting:

  • Activities
  • Measures taken
  • The overall effectiveness of the AML/CFT program

Conclusion

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In conclusion, Oman’s CFT regulatory requirements aim to ensure the effective implementation of anti-money laundering and combating the financing of terrorism measures in the country. Financial institutions must comply with these regulations to maintain a safe and secure financial system. The NAC plays a crucial role in ensuring compliance and will continue to monitor and enforce these regulations to prevent money laundering and terrorist financing activities.