Financial Crime World

OMBATING FINANCING OF TERRORISM GUIDELINES IN OMAN UNDER SCRUTINY

A recent joint evaluation report by the Middle East and Northern Africa Financial Action Task Force (MENAFATF) and the Financial Action Task Force (FATF) has assessed Oman’s efforts to combat financing of terrorism. The assessment team, comprising experts from MENAFATF and FATF, evaluated Oman’s anti-money laundering (AML) and combating the financing of terrorism (CFT) measures during an on-site visit.

Oman’s AML/CFT System

The report highlights that Oman has established an AML/CFT system that is largely in line with international standards. The new AML/CFT law, enacted in July 2010, was deemed robust by the assessment team. However, the country still relies on the 2004 Executive Regulations, pending the finalization of a new draft to align with the new law. This has created some gaps in the legal framework for preventive measures.

Gaps in Legal Framework

The report notes that Oman’s criminal code does not fully cover money laundering and terrorist financing. Specifically:

  • The money laundering offense lacks provisions for concealing or disguising property disposition.
  • The criminal liability for ML does not extend to all legal persons.
  • There have been no investigations, prosecutions, or convictions related to terrorist financing in the country.

Gaps in Legal Framework (continued)

The report also highlights gaps in Oman’s legal framework regarding:

  • Confiscation and seizure measures
  • Freezing of terrorist assets under UN Security Council Resolutions 1373 and 1267

Law Enforcement

In terms of law enforcement, the Financial Intelligence Unit (FIU) has made progress in receiving suspicious transaction reports and disseminating them to relevant authorities. However, the report notes that the FIU should improve its capacity and experience in analyzing these reports to expedite the investigation process.

Financial Institutions and Designated Non-Financial Businesses and Professions

The report found that financial institutions (FIs) and designated non-financial businesses and professions (DNFBPs) are lacking in their compliance with AML/CFT obligations. The Central Bank of Oman and Capital Markets Authority have sufficient powers and resources to conduct supervisory activities, but the report notes that they should impose more sanctions on violators.

Recommendations

The report concludes by recommending that Oman:

  • Expedite the finalization of the drafting of the Executive Regulation to address remaining shortcomings in preventive measures for FIs, particularly regarding customer due diligence.
  • Improve its framework for DNFBPs.
  • Enhance its capacity to analyze suspicious transaction reports.

Overall, the report highlights the importance of strengthening Oman’s AML/CFT regime to effectively combat financing of terrorism.