Somalia passes law on anti-money laundering, terrorism

Tuesday, February 23, 2016

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Somalia has signed into law a Bill on the money laundering and financing of terrorism activities.

A statement from the Central Bank of Somalia said Tuesday that President Hassan Sheikh Mohamud signed the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Bill into law after the Cabinet's approval.

The Bill empowers the apex bank to implement AML/CFT regulations and an examination regime to improve and strengthen the nascent financial sector in the country.

It addresses a wide range of activities and weaknesses, including money laundering and terrorism financing activities and offenses, customer verification, due diligence, and prohibited relationships and anonymous accounts.

"The AML/CFT Law is part of a broader initiative by the Central Bank of Somalia to formalize the financial sector and provide a more conducive environment for international transactions, including remittances from abroad," the statement said.

"The Central Bank of Somalia will continue its efforts to improve the country's finance sector by developing stronger relations with partners and the financial sector," it said.

The central bank said the AML/CFT Law was drafted with assistance from UN anti-drug agency (UNDOC) and in consultation with relevant Somali government institutions as well as international partners.

The Law complies with the requirements and recommendations of the Financial Action Task Force (FATF), which is an inter-governmental body that was established to set international standards on anti-money laundering and combating the financing of terrorism.

The new regulations require institutions that report to the financial reporting centre to undertake mandatory Money Laundering Risk Assessment to enable them identify, assess, monitor, manage and mitigate the risks associated with money laundering.

The institutions are also required to update their risk assessment policies and programs at least every two years in order to take into account changes, such as the entry of the institution into new markets and the introduction of new products and services.

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