Compliance Monitoring and Reporting in Oman: A Regulatory Framework

Oman’s National Committee for Anti-Money Laundering and Combating the Financing of Terrorism (NAC) serves as the primary coordinating body to oversee the implementation of anti-money laundering and combating the financing of terrorism regulations. Financial institutions in Oman are required to implement robust compliance programs to prevent and detect money laundering and terrorist financing activities.

Customer Due Diligence

According to the Central Bank of Oman’s instructions and the Law on Anti-Money Laundering and Combating the Financing of Terrorism, financial institutions must conduct customer due diligence (CDD) measures for all existing business relationships. This includes:

• Identifying and verifying customers and beneficial owners
• Assessing their risk profile

Enhanced CDD measures are required for non-face-to-face relationships, such as:

• Document certification
• Additional verification steps

Correspondent Banking Relationships

Financial institutions in Oman must have written documentation for correspondent banking relationships, especially those established before the regulations came into effect. They should also scrutinize complex and unusual large transactions and apply enhanced CDD measures for higher-risk cases.

Record Keeping

In addition to these requirements, financial institutions are expected to maintain accurate and up-to-date records of their customers’ identities, account files, and business correspondence. These records must be kept for at least 10 years after the end of the business relationship or transaction.

Compliance Obligations

To ensure compliance with the regulations, financial institutions in Oman should:

• Develop and implement anti-money laundering and combating the financing of terrorism policies, controls, and procedures that address:
  • Risk evaluation
  • Customer identification and verification
  • Record maintenance
  • Suspicious transaction reporting
  • Other relevant requirements
• Appoint a senior management-level compliance officer responsible for AML/CFT obligations
• Provide ongoing training to employees on new developments and obligations related to anti-money laundering and combating the financing of terrorism

Reporting and Response

Financial institutions are required to:

• Report suspicious transactions immediately to the Center
• Respond promptly to requests from the Center for relevant data
• Apply enhanced due diligence measures and obtain additional information in cases where high ML/TF risks are identified

By implementing robust compliance programs, financial institutions in Oman can effectively prevent and detect money laundering and terrorist financing activities, thereby protecting their reputation and contributing to a safer financial system.