Financial Crime World

SOMALIA: Financial Crime Risk Assessment Tools Launched in Mogadishu

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A high-level consultation on national risk assessment report (NRA) was held at Decale Hotel, Mogadishu on January 23, 2021, co-organized by the Office of the Prime Minister of Federal Government of Somalia and the Financial Reporting Centre (FRC). The meeting aimed to identify national risks, threats, vulnerabilities, and their impact on the Somali economy.

Key Attendees

  • Prime Minister H.E. Mohamed Hussein Roble
  • Members of his cabinet
  • Financial institutions
  • Private sector representatives
  • National economic council members
  • International partners

This marks an important milestone in Somalia’s institutional cooperation, improvement of business environment, attracting domestic and foreign investment, and establishing a connection between Somali financial institutions and international banks.

Objective of the Consultation Meeting

The objective of the consultation meeting was to identify, assess, and mitigate ML/TF risks through policy adjustments and re-evaluate the country’s legal and regulatory frameworks to enable Somali financial institutions become a trusted financial system. The desired outcomes of the NRA report are:

  • Develop a national strategic AML/CFT action plan in the next four years
  • Assist in the allocation of AML/CFT resources
  • Revising or developing guidance for “accountable institutions” that will ensure compliance with the AML/CFT regime

Role of the Financial Reporting Centre (FRC)

The FRC aims to promote the confidence level of international financial institutions and governments in Somali banks and Money Transfer Businesses (MTBs by developing a sound system of detecting and disrupting money laundering and terrorism financing in Somalia. The FRC, which serves as Somalia’s Financial Intelligence Unit (FIU), receives, analyzes, and disseminates information.

Federal Government of Somalia’s Reform Process

The Federal Government of Somalia is in the midst of reform process to operationalize and implement an effective AML/CFT regime. There is strong political and international support to enforce the measures and standards required by the AML/CFT law, regulations, and FATF recommendations.

Upcoming Events

  • MENA-FATF Mutual Evaluation in 2024

Note: The NRA report on money laundering and terrorist financing is a key review document of the Federal Government of Somalia’s capacity to combat illicit financial crimes and one of the debt relief triggers on the completion point of the extended credit facility (ECF).