Financial Crime World

Somalia Moves to Strengthen Financial System Against Money Laundering and Terrorism Financing

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MOGADISHU, Somalia - The Federal Government of Somalia (FGS) has taken several steps to develop a sound system for detecting and disrupting illegal activities in the country’s banking and money transfer businesses.

Establishing a National AML/CFT Committee and Taskforce

The FGS has established a National Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Committee and Taskforce to oversee the implementation of anti-money laundering and combating the financing of terrorism laws. The committee is chaired by the Minister of Finance, while the taskforce is headed by the Director of the Financial Reporting Center (FRC).

Increased Coordination and Intelligence Gathering

The FGS has strengthened its efforts to combat illegal activities through increased coordination among national intelligence and law enforcement agencies, national regulatory authorities, and other competent authorities. Additionally, a Financial Intelligence Unit (FIU) has been established to collect data on financial transactions and document suspicious transfers.

Key Developments

  • Establishment of a National AML/CFT Committee and Taskforce to oversee the implementation of anti-money laundering and combating the financing of terrorism laws.
  • Strengthened efforts to combat illegal activities through increased coordination among national intelligence and law enforcement agencies, national regulatory authorities, and other competent authorities.
  • Establishment of a Financial Intelligence Unit (FIU) to collect data on financial transactions and document suspicious transfers.
  • Increased reporting requirements for banks, financial institutions, and designated non-financial businesses.

Commentary

The FGS’s efforts to strengthen its financial system against money laundering and terrorism financing are a positive step towards rebuilding the country’s credibility in the global financial networks. However, more needs to be done to effectively combat money laundering and terrorist financing.

  • The government must continue to strengthen its regulatory framework.
  • Public-private sector cooperation must be enhanced.
  • Awareness among citizens about the risks of money laundering and terrorism financing must be increased.

Conclusion

The Federal Government of Somalia’s efforts to develop a sound system for detecting and disrupting illegal activities in the country’s banking and money transfer businesses are an important step towards promoting financial stability and combating money laundering and terrorist financing.