Financial Crime World

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Combating Money Laundering and Terrorist Financing in Somalia

A New Era of Transparency and Accountability

In 2016, the Somali parliament passed the Anti-Money Laundering and Countering the Financing of Terrorism Act (AML/CFT), making combating money laundering and terrorist financing a government priority. This landmark legislation has established key institutions and laid the foundation for addressing these complex challenges.

Key Institutions

National Anti-Money Laundering and Financing Terrorism Committee (NAMLC)

  • Oversees the AML/CFT regime in Somalia
  • Develops a national strategy
  • Provides funding for capacity building
  • Sets strategic priorities for the FRC
  • Establishes information sharing among member institutions
  • Enhances domestic coordination

Financial Reporting Centre (FRC)

  • An independent national agency responsible for:
    • Receiving, requesting, analyzing, and disseminating information concerning money laundering and terrorist financing
    • Undertaking systematic collection and analysis of data associated with money transfers
    • Documenting suspicious transactions
    • Providing strategic intelligence to increase risk awareness

The AML/CFT Taskforce

Established to operationalize and enforce NAMLC directives, the Taskforce is chaired by the Director of FRC and includes representatives from various institutions, such as:

  • Central Bank
  • National Intelligence and Security Agency (NISA)
  • Attorney General’s Office
  • Ministry of Finance

FRC Role in Combating Financial Crimes

The FRC’s vision and mission are to become a trusted and exemplary agency in support of a robust financial system hostile to financial crimes. The FRC plays a crucial role in:

  • Building and maintaining an environment that identifies and eradicates money laundering and terrorist financing
  • Working closely with reporting entities to prevent and combat financial crimes

International Obligations

Somalia has international obligations to combat money laundering and terrorist financing, as per the Financial Action Task Force (FATF)’s 40 recommendations. The FRC contributes to building and maintaining an environment in Somalia that is directed towards identifying and eradicating money laundering and terrorist financing.

Conclusion

The AML/CFT Act of 2016 and the institutions established under it have laid the foundation for combating money laundering and terrorist financing in Somalia. The FRC plays a crucial role in addressing these challenges and working closely with reporting entities to prevent and combat financial crimes.