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Central Bank of Oman Issues New Guidance on Customer Due Diligence for Financial Institutions

The Central Bank of Oman has issued new guidance on customer due diligence (CDD) for financial institutions operating in the country. The guidance aims to ensure that these institutions identify and take reasonable measures to verify the identity of customers, including individuals and entities, who have a business relationship with them.

Key Requirements

According to the guidance, financial institutions must ensure that they identify and verify the following individuals:

  • Trustees, managers, directors, or persons in equivalent positions
  • Settlors, founders, or persons in equivalent positions
  • The trust or legal arrangement, including any persons settling assets into the trust or legal arrangement
  • Protectors or persons in equivalent positions exercising ultimate effective control over the trust
  • Beneficiaries or persons in equivalent positions
  • Signatories

Additionally, financial institutions must identify beneficiaries who have not been defined at the time of establishing a business relationship and refrain from making disbursements until they have been verified.

Enhanced Due Diligence Measures

Financial institutions are required to apply enhanced due diligence measures in certain situations, including:

  • Complicated and unusual large transactions
  • Unusual patterns of transactions without an apparent economic or lawful purpose
  • Transactions with persons and financial institutions from countries identified by the Financial Action Task Force (FATF) as being at high risk for money laundering and terrorist financing

Record Keeping

Financial institutions must maintain records of all customer due diligence activities, including documents evidencing the identities of customers and beneficial owners, account files, and business correspondence, for a minimum period of 10 years.

Internal Policies, Controls, and Procedures

The guidance requires financial institutions to develop and implement anti-money laundering (AML) and combating the financing of terrorism (CFT) policies, controls, and procedures that ensure compliance with the provisions of the Law, relevant instructions, and decisions issued by the Central Bank of Oman and the Center.

Monitoring and Review

Financial institutions must monitor the implementation of their CDD policies, controls, and procedures and enhance them as necessary to ensure effective risk management and mitigation.

Conclusion

The new guidance aims to strengthen the fight against money laundering and terrorist financing in Oman, ensuring a safer and more secure financial system for all stakeholders.