Financial Crime World

Yemen Bans Casinos, Tightens Anti-Money Laundering Measures

In a bid to combat illegal activities and protect its financial system, Yemen has taken decisive action by banning casinos altogether and strengthening its anti-money laundering (AML) measures.

Background

The Ministry of Industry and Commerce is responsible for registering commercial businesses in the country, including local companies and foreign branches. However, there are no trust funds or other forms of legal arrangements in Yemen.

Meanwhile, the Ministry of Social Affairs and Labor oversees charitable societies and institutions, but a recent assessment found significant deficiencies in its supervision and oversight due to a lack of resources and communication gaps with the sector.

International Conventions

Yemen has signed and ratified several international conventions related to AML, including:

  • The 1998 Vienna Convention
  • The 2000 Palermo Convention

The country’s legal framework allows for judicial cooperation in the field of mutual legal assistance (MLA) and extradition.

Shortcomings in Yemen’s AML System

However, a recent assessment by the Financial Action Task Force (FATF) found that Yemen’s AML system has several shortcomings. These include:

  • The law does not define what constitutes “funds” or cover all designated categories of predicate offenses.
  • There is no provision for criminal liability of legal persons and ML sanctions are not considered proportionate.
  • Customer due diligence measures in Yemen are limited, with many financial institutions (FIs) failing to verify the identity of beneficial owners or economic right holders.
  • FIs are also not obligated to obtain information relating to the purpose and nature of business relationships.

Commitment to Strengthen AML Regime

To address these shortcomings, Yemen has committed to strengthening its AML regime and improving cooperation with international partners. The country has banned casinos altogether as part of its efforts to prevent illegal activities and protect its financial system.

FATF Ratings

Yemen’s compliance with FATF recommendations is rated as follows:

  • Legal Systems: Partially Compliant
  • ML Offense - Mental Element and Corporate Liability: Partially Compliant
  • Confiscation and Provisional Measures: Partially Compliant
  • Preventive Measures:
    • Secrecy Laws Consistent with the Recommendations: Partially Compliant
    • Customer Due Diligence: Non-Compliant

Conclusion

Overall, Yemen’s AML regime requires significant improvement to meet international standards. The country’s efforts to strengthen its AML measures and prevent illegal activities are welcome, but more needs to be done to ensure the integrity of its financial system.