Egypt announced on Monday the completion of the evaluation of the implementation of anti-money laundering and counter-terrorist financing, which was carried out by experts from the Middle East and North Africa Financial Action Task Force (MENAFATF), of which Egypt is a member.
The assessment process was carried out per the compliance assessment methodology issued by the Financial Action Task Force (FATF), an international body responsible for setting international standards that countries must adhere to.
The Egyptian Money Laundering and Terrorist Financing Combating Unit (EMLCU), which is part of the Central Bank of Egypt and is the national coordinating body for the evaluation process, made great efforts during the assessment process.
The EMLCU, headed by Counselor Ahmed Khalil, was keen on effective communication between all parties concerned with combating money laundering, terrorist financing and the proliferation of arms in the country.
It also conducted a self-assessment by national experts, well before the formal start of the assessment process, a matter that helped identify the issues in the control systems.
The self-assessment resulted in a number of outputs that were worked out in coordination between the Unit and all concerned authorities in the country.
The Unit also held meetings and workshops with representatives of the concerned authorities to introduce international standards and help them understand such standards and how to complete the questionnaires and requests received from the evaluation team, and follow up on the completion of information, statistics, and practical cases, which had a significant impact on Egypt's obtaining high evaluation scores, and its appearance in an honourable image before international bodies.
The evaluation process resulted in the issuance of a detailed report that includes all aspects of the implementation of international standards by Egypt to combat money laundering, terrorist financing and the proliferation of arms.
The report was discussed and approved during the 32nd meeting of the MENAFATA held on Monday, in the presence of member states and observers from countries and international organisations.
The report highlighted that Egypt has proven that it has a good understanding of the risks of money laundering and terrorist financing that it is exposed to by conducting a national assessment of the risks of money laundering and terrorist financing through the EMLCU and with the participation of all concerned parties, and it has relied on a national methodology to identify threats, weaknesses, and consequences.
"The outputs were also shared with all national authorities and the private sector in the country, showing effective local coordination, provision and sharing of data between the public and private sectors," the report pointed out.
"Egypt has adopted policies and measures that are compatible with the identified risks. These policies aim to address the legislative and supervisory frameworks, increase the effectiveness of all parties and institutions concerned with the requirements of combating money laundering and terrorist financing, and supporting the institutional framework and local and regional cooperation in this field," the report added.
The report touched on the state's efforts in combating terrorist financing operations, as it indicated that Egypt has adopted a national strategy to combat terrorism and its financing, which is characterised by flexibility, considering international and local developments that occur on this phenomenon, as Egypt deems combating terrorism and its financing as one of the policy objectives of the state.
The report also hailed the great progress made by Egypt in combating terrorism and its financing, which was reflected in the decrease in terrorist acts, due to the state’s efforts to eliminate many terrorist groups and the application of effective, proportionate, and deterrent penalties when committing the crime of terrorist financing, including autonomous terrorism financing.
The report clarified the efforts made by the state to identify and investigate terrorist financing activities, and the specialised and trained cadres that are entrusted with combating terrorism and its financing which received specialised training courses in financing issues and its patterns, the most prominent sources of financing and the new methods used by terrorist financiers and facilitation networks to finance terrorist activities.
The report also praised the efforts made by the state to enhance the authorities' ability to identify potential terrorist financing activities and conduct investigations into terrorism-related activities, as there are specialised departments to investigate related issues and train their staff to raise the quality of investigations and thus achieve the objectives of the national strategy.
The report lauded Egypt's cooperation with more than 38 countries around the world in the field of combating terrorism and its financing, which resulted in the arrest of several terrorists, the dismantling of terrorist financing networks, informing other countries of foreign terrorist fighters and the seizure of funds at the borders, controlling many criminal networks, uncovering, dismantling and prosecuting terrorist cells in other countries, eliminating terrorist groups in Egypt, including Ansar Beit al-Maqdis, Ajnad Misr and Ansar al-Sharia Brigades in the land of Kinana, in addition to eliminating cluster cells belonging to major terrorist organisations.
The report indicated that Egypt has effective mechanisms to implement Security Council resolutions related to preventing terrorists, terrorist organisations and terrorist financiers from collecting, transferring and using funds, as well as from misusing the non-profit organisations' sector, as well as preventing persons and entities involved in financing the proliferation of weapons of mass destruction from collecting and transferring funds and their use, per United Nations Security Council resolutions.
The report commended the understanding of the regulatory and supervisory authorities on the financial and non-financial sectors, especially the Central Bank of Egypt, of the risks of money laundering and terrorist financing, and their continuous sectoral assessment of the financial institutions subject to their oversight, which would allow them to continue to form a clear understanding of the risks facing these institutions and authorities.
"Financial institutions also have a good understanding of the money laundering and terrorist financing risks they face and implement risk mitigation measures based on a good risk-based approach," the report added.
The report clarified the efforts and measures taken by the Egyptian authorities to mitigate the risks of misuse of legal persons and legal arrangements, and the state's keenness to provide information related to the establishment of legal persons and to provide several channels to access basic information and information related to the real beneficiary of legal entities established in the State, which led to the country obtaining a degree of commitment equivalent to that obtained by the major countries, a matter which will have positive effects in attracting foreign investments from all countries, being one of the most important economic pillars for any country.
The report referred to the country's efforts to enhance international cooperation to combat money laundering, financing terrorism and related predicate crimes.
It also indicated that Egypt employs a wide range of forms of international cooperation with its foreign counterparts to exchange different types of financial and intelligence information to combat money laundering, relevant predicate crimes and terrorist financing.
The EMLCU was applauded in the report for its ability to both, directly and indirectly, access a wide range of financial, intelligence and other relevant information while looking into cases of money laundering and related predicate crimes and terrorist financing.
The report also hailed the quality of the Unit's reports and referrals that support the operational needs of the authorities concerned, particularly in the field of terrorist financing, as the Unit produces financial intelligence using a variety of sources, which law enforcement and other competent authorities use to develop evidence and track criminal proceeds, as well as the availability of distinguished human, logistical and information resources that help the Unit to process and analyze the financial information it receives or collect.
The Unit also was praised due to its contributions to research and strategic analysis of the reports and information received, to identify trends and patterns of money laundering and terrorist financing, as well as its effective role in local and international cooperation and information exchange.
In light of the results of that report, the Egyptian Money Laundering and Terrorist Financing Combating Unit (EMLCU) ranked highly among its counterpart financial intelligence units at the international, regional, and continental levels.
"The effectiveness of the competent authorities' use of financial information and other relevant information to develop evidence to investigate money laundering operations, related predicate crimes and terrorist financing, and to track criminal proceeds, and the extent to which the authorities were able to use financial information through direct and indirect access to a wide range of national databases, which contribute to the follow-up of potential financial movements, as well as the availability of the necessary resources and expertise with these authorities to conduct investigations in cases of money laundering, predicate crimes, terrorist financing and relying on financial information," the report assured.
The report showed the level of commitment of Egypt in terms of the consistency of its laws, procedures, and regulations with international standards in this regard.
The result of this important aspect of the evaluation process is very positive, as the report indicated that Egypt has a legal system consistent with the recommendations of the Financial Action Task Force, where the state at an early stage strengthened legislative frameworks in line with international standards on money laundering and terrorist financing, the most important of which are the amendments to the Anti-Money Laundering Law and its Executive Regulations, the Anti-Terrorism Law and the Entities Regulation Law.
In addition, the law regulating the practice of civil work, the law of the Central Bank and the banking system, the due diligence procedures and customer identification applied in financial and non-financial institutions, and the amendment of the executive regulations of the Trade Register Act was issued to enhance ways to identify the real beneficiaries of legal persons in a manner that ensures the enhancement of transparency in the state, and other legislative and oversight frameworks.