Financial Crime World

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Oman’s Anti-Money Laundering and Combating Terrorism Financing Efforts

Muscat, Oman - The Central Bank of Oman (CBO) has implemented several measures to combat money laundering and financing of terrorism activities in Oman. The Anti-Money Launderling and Combating Terrorism Financing Law (Royal Decree 30/2016) and the Executive Regulations of the AML/CFT Law aim to prevent the misuse of financial systems for illegal purposes.

AML/CFT Obligations

The AML/CFT Law applies to:

  • Banks
  • Non-financial businesses and professions
  • Non-profit associations

Under the law, banks are required to:

  • Retain records, documents, information, and data relating to client identity and transaction records for a period of ten years
  • Notify the National Financial Information Centre immediately if they suspect or have reasonable grounds to believe that any funds relate to proceeds of crime, money laundering, or terrorism financing

The AML/CFT Law sets out several obligations regarding checks that banks are required to undertake, including:

  • Correctly identifying counterparties, clients, and beneficiaries
  • Determining whether a client is a politically exposed person (PEP) and carrying out further due diligence for PEPs
  • Undertaking further due diligence in respect of any party for whom they open a bank account

Banks are also prohibited from opening anonymous accounts or providing services to such accounts.

Depositor Protection

The Bank Deposit Insurance Scheme (BDIS) is a rule-based scheme that provides comprehensive insurance cover on specified deposits with banks operating in Oman. The BDIS was established through a Royal Decree in 1995 and aims to maintain confidence in the banking system and promote financial stability.

Under the BDIS, all licensed banks are required to contribute premiums to the scheme, which is managed by an Administrative Committee comprising representatives from the CBO and member banks. The current compensation amount for deposits is OMR20,000, while deposits of OMR20,000 and less will be compensated in full.

Bank Secrecy

Article 70 (b) of the Banking Law prohibits banks and their employees from disclosing or revealing any client-related information unless required by law or instructed by the CBO. Customer information may only be disclosed with the customer’s consent, which can be granted through a general consent as part of the initial client on-boarding/account-opening forms.

The CBO has the power to impose penalties on banks that breach these obligations, including fines and suspension/cancellation of banking licenses.

Conclusion

Oman’s AML/CFT efforts aim to prevent the misuse of financial systems for illegal purposes. The BDIS provides a safety net for depositors, while bank secrecy requirements ensure confidentiality of customer information. These measures demonstrate Oman’s commitment to maintaining a stable and secure financial system.