Yemen Tightens Belts on Anti-Money Laundering with New Regulations

Sana’a, Yemen - In a bid to combat the growing menace of money laundering and terrorist financing, Yemen has introduced a raft of regulations aimed at tightening the noose on financial institutions and individuals involved in illegal activities.

Key Players and Responsibilities

• The Central Bank of Yemen (CBY) is responsible for overseeing the banking system’s compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations.
• The Financial Information Unit (FIU) receives, analyzes, and disseminates suspicious transaction reports from financial institutions, working in tandem with international entities to combat money laundering and terrorist financing.
• The National Committee for AML/CFT formulates and updates Yemen’s national AML/CFT strategies, monitors their implementation, and ensures the country’s commitment to international standards.

Key Legislation: Law no. 1/2010 On Anti-Money Laundering and Counter-Terrorism Financing

• This law provides the primary legal framework for AML/CFT activities in Yemen.
• It outlines definitions, obligations, penalties, and measures for combating money laundering and terrorist financing.

Definitions and Penalties

Money Laundering

• According to Article 3(a) of the law, a person is guilty of money laundering if they knowingly or have reason to believe that funds are from criminal activities and transfer, conceal, acquire, possess, or use them.
• Complicity in money laundering is also punishable, as well as involvement in predicate crimes such as:
  • Organized crime
  • Terrorism
  • Smuggling
  • Tax offenses
  • Environmental crimes

Terrorism Financing

• The law defines terrorism financing as the intentional raising, providing, collecting, or moving of funds towards a terrorist entity, individual, or act.
• It imposes criminal liability on those who:
  • Initiate
  • Participate
  • Incite
  • Order
  • Collude
  • Conspire
  • Advise
  • Assist in such activities

Financial Information Collection Unit

• This unit is established to collect and analyze financial information related to money laundering and terrorist financing.
• It will work closely with domestic and international authorities to combat these illegal activities.

Impact and Expectations

The new regulations are expected to strengthen Yemen’s efforts to combat money laundering and terrorist financing, and to enhance the country’s reputation as a responsible player in the global financial system.