Financial Crime World

Oman Meets International Standards in Anti-Money Laundering and Terrorism Financing Efforts

The Sultanate of Oman has made significant strides in setting up an anti-money laundering (AML) and combating terrorism financing (CFT) system that is largely in line with international standards, according to a joint evaluation by the Middle East and North Africa Financial Action Task Force (MENAFATF) and the Financial Action Task Force (FATF). However, the assessment team also identified several gaps and areas for improvement.

Key Findings

  • The Sultanate of Oman has enacted a new AML/CFT law in 2010, which is considered robust by the assessment team.
  • The law provides a comprehensive framework for preventive measures, including customer due diligence requirements, reporting suspicious transactions, and freezing assets related to terrorism financing.
  • However, the implementation of these provisions is still pending, as the Executive Regulations are yet to be finalized.

Concerns Regarding Effectiveness

  • The money laundering offense does not cover all aspects of property concealment or disguise.
  • The criminal liability for money laundering is limited to some types of legal persons.
  • The number of convictions for money laundering is extremely low.

Terrorism Financing Concerns

  • Oman’s legislation provides a wide range of confiscation, seizure, and provisional measures, but the effectiveness of these provisions is still insufficient due to the lack of investigations, prosecutions, or convictions related to terrorist financing.
  • Oman has no laws or procedures in place to implement United Nations Security Council Resolutions (UNSCR) 1373 and most of UNSCR 1267 and its successor resolutions.

FIU and Supervisory Activities

  • The Financial Intelligence Unit (FIU), which is responsible for analyzing suspicious transaction reports (STRs), has made progress in functioning effectively.
  • However, the time spent on analyzing STRs should be improved.
  • The Central Bank of Oman and Capital Markets Authority have sufficient powers and financial resources to conduct their tasks, but they have only imposed one administrative penalty for an AML/CFT violation.

Recommendations

  • Oman should prioritize the implementation of UNSCR 1373 and most of UNSCR 1267 and successor resolutions.
  • The pending update of the Executive Regulation is expected to address some gaps in the legal framework for preventive measures, including customer due diligence requirements.
  • The Central Bank of Oman and Capital Markets Authority should utilize their full sanctioning powers to address violations of AML/CFT requirements.

Conclusion

While Oman has made significant progress in setting up an AML/CFT system that meets international standards, there are still several areas for improvement to ensure the effectiveness of its anti-money laundering and terrorism financing efforts.