Financial Crime World

Financial Institutions Warned of Money Laundering and Terrorist Financing Risks

Muscat, Oman - Financial institutions (FIs) in Oman have been warned to be vigilant against money laundering (ML) and terrorist financing (TF) risks associated with various financial products and non-financial businesses.

Identified Risk Areas

  • Life insurance products: misuse of saving or investment features for ML
  • General insurance products: early cancellation of policies with return of premium for ML
  • Prepaid cards: anonymity and ease of cross-border transactions
  • Tax evasion: underreporting income or creating false deductions
  • Non-financial businesses (e.g. travel agencies, car dealerships, cash-intensive businesses): providing means to legitimize illicit funds

Risk-Based Approach Crucial

The Financial Intelligence Unit (FIU) has emphasized the importance of a risk-based approach (RBA) in identifying and assessing ML/TF risks. FIs are required to:

  • Apply a RBA to allocate resources on a risk-sensitive basis
  • Conduct regular business ML/TF risk assessments to understand risk exposure and identify areas for improvement
  • Establish a good anti-money laundering (AML) and counter-terrorist financing (CFT) compliance program by highlighting risks associated with their business and specific controls to be applied

Enhancing AML/CFT Compliance

The FIU urges FIs to:

  • Conduct regular risk assessments
  • Implement effective customer due diligence (CDD) procedures
  • Report suspicious transactions to the authorities
  • Maintain accurate and up-to-date records of all transactions and activities
  • Cooperate with law enforcement agencies in investigations related to ML/TF

Shared Responsibility

AML/CFT compliance is a shared responsibility between FIs, regulators, and law enforcement agencies. It is essential for all stakeholders to work together to prevent and combat ML/TF risks in Oman’s financial sector.

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