Financial Crime World

Financial Crime Prevention Strategies in Yemen: Aden’s Financial Intelligence Unit Makes Significant Progress

In a significant step forward in fighting financial crime, Aden’s Financial Intelligence Unit (FIU) has published its second annual report, detailing its efforts to combat terrorist financing and money laundering. The report marks another milestone in the partnership between the FIU and USAID’s Economic Recovery and Livelihoods Program (ERLP), which has been instrumental in strengthening Yemen’s financial system.

A Stronger Financial System

Established in 2019, the Aden-based FIU serves as a central hub for receiving, analyzing, and disseminating financial intelligence related to suspicious transactions and activities. Since its inception, the Unit has worked closely with USAID ERLP experts to establish a robust framework for identifying patterns, trends, and anomalies within financial data that may indicate connections to criminal and terrorist activities.

Enhanced Financial Intelligence Capabilities

The collaboration between the FIU and USAID ERLP has borne fruit, with the FIU’s financial intelligence capabilities enhanced significantly. The Unit has also made significant strides in aligning its oversight activities with international anti-money laundering/counter financing terrorism (AML/CFT) best practices.

Key Partnerships

USAID ERLP played a key role in supporting the FIU’s development, including an analysis of Yemen’s AML/CFT law to identify areas requiring revision to meet FATF standards. The analysis and recommendations were reviewed with Unit staff, leading to key amendments that address shortcomings in the law.

  • The Central Bank of Yemen (CBY) has also been a key partner, publishing two circulars in 2022 providing instructions on bank compliance policies necessary to meet AML/CFT requirements and precise indicators and red flags related to human trafficking, sexual exploitation, and insurance fraud schemes.
  • Through its cooperation with USAID/ERLP, the FIU has addressed legislative and legal gaps, resulting in an improved business environment and heightened transparency and integrity.

Achievements

The Aden FIU has made significant progress in:

  • Establishing a five-person AML/CFT unit within the CBY to oversee inspections of banks and exchange houses
  • Conducting on-site inspections of banks participating in foreign exchange (FX) auctions
  • Adopting AML/CFT procedures and mitigation measures related to FX auctions
  • Signing Memoranda of Understanding with authorities in six countries to streamline information sharing

Capacity Development

To further enhance compliance, USAID ERLP has provided targeted capacity development for the Unit’s staff, including:

  • A training-of-trainers program for seven Unit staff
  • An in-depth workshop with members of Yemen’s AML/CFT National Committee

The Aden FIU is committed to presenting itself in the best possible light, adhering to the highest standards and qualities, and looks forward to further enhancing its positive image through continued partnership and cooperation with USAID/ERLP.