Financial Crime World

Follow-up Report for the Syrian Arab Republic: Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT)

Summary of the Report

The “Follow-up Report for the Syrian Arab Republic” highlights several deficiencies in the implementation of AML/CFT measures. These include:

  • The absence of laws and regulations requiring financial institutions to provide customer identification records.
  • Obligations related to customer identification verification that are not applied in case of dealing through agents.
  • The absence of legislative provisions obligating insurance companies, exchange institutions, and other financial institutions to verify the identity of beneficial owners.

Deficiency 1: Absence of Laws and Regulations

Lack of Customer Identification Records

The report notes that while Article 5(c) of Legislative Decree No. 30 and Article 2(e) of the executive instructions of Legislative Decree No. 33 for 2005 require financial institutions (FIs) to verify compliance with AML/CFT measures, there is no provision obligating them to provide customer identification records to the person responsible for monitoring compliance or other competent officials.

Insufficient Supervisory Instructions

The report notes that while Article 2(b) of the executive instructions requires FIs to ensure that a person claiming to act on behalf of a customer is a truly authorized person, and to identify and verify their identity, there are no supervisory instructions issued to insurance companies regarding this matter.

Deficiency 3: Absence of Legislative Provision

Verification of Beneficial Owners and Ongoing Supervision Operations

There is no legislative provision obligating insurance companies, exchange institutions, and other financial institutions to:

  • Verify the identity of beneficial owners when starting dealing with the institution.
  • Identify natural persons owning legal persons or exercising ultimate effective control over them.
  • Perform ongoing supervision operations.

However, the report notes that Article 2 of the executive instructions requires FIs to determine the owner of economic rights in a manner ensuring that they have taken reasonable measures to verify their identity. The report also mentions that Decision No. 15 includes detailed information about what financial and banking institutions are required to obtain regarding legal persons and arrangements, including understanding ownership structure and actual control over customers.

Conclusion

Overall, the report highlights areas where the Syrian Arab Republic needs to improve its implementation of AML/CFT measures, particularly in relation to customer identification verification and ongoing supervision operations.