SOMALIA TAKES ACTION AGAINST NON-COMPLIANT FINANCIAL INSTITUTIONS
======================================================
The Financial Regulatory Commission (FRC) of Somalia has taken a series of enforcement actions against financial institutions for non-compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) regulations.
Background
According to Article 21(11) of the AML/ CFT Act, 2016, the FRC has the power to take formal warnings, revoke or suspend business licenses, and impose fixed penalty fines on reporting entities that fail to comply with these obligations.
Enforcement Actions in 2019
In 2019, the FRC took a range of enforcement steps against financial institutions. These included:
- Issuing formal warnings to banking institutions and money transfer businesses (also known as hawaalas) for non-compliance with AML/CFT regulations.
- Issuing suspension orders and revoking business licenses in some cases.
Financial Penalties
Financial penalties were imposed on both banking institutions and money transfer businesses that failed to comply with the regulations. The FRC’s actions are aimed at ensuring that financial institutions operating in Somalia meet their obligations under AML/CFT regulations and prevent the misuse of the country’s financial system.
Purpose of Enforcement Actions
The purpose of the FRC’s enforcement actions is to:
- Ensure that financial institutions operating in Somalia comply with AML/CFT regulations.
- Prevent the misuse of the country’s financial system.
- Protect the integrity of Somalia’s financial sector.