Yemen’s Institutions Lacking in Oversight, National and International Cooperation

A recent assessment has revealed significant deficiencies in the supervision and oversight role of Yemen’s Ministry of Social Affairs, as well as a lack of communication between the ministry and national non-profit societies and institutions.

Deficiencies in Supervision and Oversight

• The shortage of human, financial, and technical resources within the Ministry of Social Affairs has led to major gaps in its supervision and oversight activities.
• There is a significant gap in communication between the ministry and national non-profit societies and institutions regarding awareness raising on terrorist exploitation risks and taking necessary measures to protect this sector.

Anti-Money Laundering (AML) Mechanism

• Yemen’s AML mechanism relies heavily on the AML Committee, which comprises members from different authorities. However, there is a lack of coordination between committee members and the authorities they represent, hindering effective cooperation.
• Despite having signed and ratified several international conventions aimed at combating money laundering and terrorist financing, including the 1998 Vienna Convention and the 2000 Palermo Convention, Yemen lacks statistics showing the number of MLA requests received and executed.

National and International Cooperation

• Yemen has a legal system in place that provides for objective conditions for extradition. However, the law does not set dual criminality as a condition with respect to AML crimes, allowing for the extradition of non-Yemeni nationals convicted of such crimes.
• The country’s legal framework is not fully compliant with the Financial Action Task Force (FATF) Recommendations, including:
  • Lack of definition for “funds” and properties
  • Absence of express provisions covering corporate liability
  • Limitations on confiscation and provisional measures

Preventive Measures

• Yemen’s secrecy laws are consistent with the FATF Recommendations, but customer due diligence is not fully implemented.
• Many financial institutions (FIs) in Yemen do not verify the identity of beneficial owners or economic right holders, and there is no obligation to obtain information relating to the purpose and nature of business relationships.

Conclusion

Yemen’s institutions need significant improvement in terms of oversight, national and international cooperation, and preventive measures to effectively combat money laundering and terrorist financing.