Regulatory Alerts2020-01-01
Prime Minister's Decision No. 457 of 2020 Amending Certain Provisions of the Executive Regulations of the Anti-Money Laundering Law
The Egyptian Prime Minister issued Decision No. 457 of 2020 to amend the Executive Regulations of the Anti-Money Laundering Law, specifically updating definitions and expanding the scope of regulated entities. The decree mandates strict customer due diligence, including the identification of beneficial owners and risk-based monitoring, while clarifying the independent investigative and reporting powers of the Financial Monitoring Unit. Additionally, it establishes specific customs declaration thresholds for currency and instruments to prevent illicit financial flows.
Official Gazette - No. 8 (Repeated) on February 23, 2020
Prime Minister's Decision No. 457 of 2020 Amending Certain Provisions of the Executive Regulations of the Anti-Money Laundering Law Issued by Prime Minister's Decision No. 951 of 2003
Prime Minister Having reviewed the Constitution; And the Penal Code; And the Code of Criminal Procedure; And the Anti-Money Laundering Law issued by Law No. 80 of 2002; And the Central Bank, Banking System and Currency Law issued by Law No. 88 of 2003; And Law No. 10 of 2009 regulating supervision over markets and non-banking financial instruments; And Law No. 8 of 2015 concerning the regulation of terrorist entities and terrorists lists; And the Anti-Terrorism Law issued by Law No. 94 of 2015; And the Executive Regulations of the Anti-Money Laundering Law issued by Prime Minister's Decision No. 951 of 2003; And upon what was presented by the Chairman of the Board of Trustees of the Financial Monitoring Unit for Combating Money Laundering and Financing of Terrorism;
Decided:
( Article One ) The definitions of (Funds), (Financing of Terrorism), and (Supervisory Authorities) contained in Article (1), and Articles 3, 14, 22 bis, 22 bis (b), 22 bis (c), 23, and the second paragraph of Article 34 bis of the Executive Regulations of the Anti-Money Laundering Law issued by Prime Minister's Decision No. 951 of 2003, are replaced by the following texts:
Official Gazette - No. 8 (Repeated) on February 23, 2020
Article 1 - Definitions: Funds or Assets: All financial and virtual assets and economic resources, including oil and other natural resources, property, national or foreign currencies, and securities or commercial papers of any value or type, whether tangible or intangible, movable or immovable, regardless of the means of obtaining them, and legal documents, instruments, and records confirming all of the above in any form, including digital or electronic form, and all rights related to any of them, including bank credit, traveler's checks, banking networks, and letters of credit, as well as any returns, profits, or other income sources derived from or generated by these funds or assets, or any other assets that may be used to obtain financing or products or services. Virtual assets with digital value that can be traded, transferred, or converted digitally and can be used as a payment or investment instrument are also included.
Financing of Terrorism: Financing of terrorism refers to the collection, receipt, possession, supply, transfer, or provision of funds or other assets, weapons, ammunition, explosives, equipment, data, information, materials, or otherwise for any individual or organized or unorganized terrorist activity, domestically or internationally, directly or indirectly, regardless of its source and by any means, including digital or electronic form, with the intent to use them, wholly or partly, in committing any terrorist crime or knowing that they will be used for that purpose, whether the terrorist act occurred or not, or by providing training places or safe havens for one or more terrorists, or supplying them with weapons, documents, or otherwise, or by any other means of support, financing, or travel assistance, knowing thereof, even if unrelated to the terrorist act.
Official Gazette - No. 8 (Repeated) on February 23, 2020
Supervisory Authorities: They are the competent authorities for supervising financial institutions and owners of non-financial professions and businesses according to the text of the first and second paragraphs of Article (7) of the Law, which are as follows: The Ministry of Communications and Information, which supervises the National Postal Authority regarding the financial services it provides. The Central Bank of Egypt, which supervises banks operating in Egypt, their branches abroad, branches of foreign banks operating in Egypt, exchange companies, and other entities licensed to deal in foreign currency, whenever these other entities professionally - for the benefit of a client or on their behalf - engage in one or more activities licensed for financial institutions and entities conducting money transfers. The Financial Regulatory Authority, which supervises entities engaging in any type of insurance or reinsurance activities, private insurance funds, brokerage activities in the field of insurance, entities operating in the securities field, entities receiving funds, real estate securitization entities, entities engaging in financial leasing activities, entities operating in factoring activities, entities engaging in real estate financing activities, and entities engaging in microfinance activities. The Ministry of Trade and Industry, competent for supervising real estate brokers, which supervises the real estate brokers mentioned in this Article. The Ministry of Supply and Domestic Trade, competent for supervising dealers in precious metals and gemstones, which supervises the dealers in precious metals and gemstones mentioned in this Article. The Ministry of Tourism, competent for supervising gambling clubs, which supervises the gambling clubs mentioned in this Article. The Bar Association, which supervises the lawyers mentioned in this Article. The Traders Syndicate, which supervises the accountants mentioned in this Article.
Official Gazette - No. 8 (Repeated) on February 23, 2020
Regarding other entities whose primary activity is subject to supervision and is practiced professionally - for the benefit of a client or on their behalf - in one or more activities licensed for financial institutions, the supervisory authorities over them are the same authorities that supervise their primary activity. Supervisory authorities to be identified by a decision of the Prime Minister, which supervise financial institutions or owners of non-financial professions and businesses specified in the decision and define their obligations. The Financial Monitoring Unit for Combating Money Laundering and Financing of Terrorism, which supervises any financial institution or entity from owners of non-financial professions and businesses that is not subject to the supervision of the supervisory authorities mentioned in this Article.
Article (3): The Unit "independently" shall exercise the authorities stipulated in the Law and in the two Presidential Decisions No. 164 of 2002 concerning the Financial Monitoring Unit, amended by Decisions No. 243 of 2009 and No. 287 of 2019, and No. 28 of 2003 concerning the work system and employees of the Financial Monitoring Unit, specifically as follows:
- Receiving notifications submitted to it by financial institutions and owners of non-financial professions and businesses regarding any operations suspected of constituting proceeds or involving money laundering or financing of terrorism or attempts to carry out such operations, and recording them in the Unit's database according to the procedures specified in these Regulations.
- Receiving information, data, statistics, and reports related to money laundering and associated crimes and financing of terrorism, including information and data related to operations suspected of constituting proceeds or involving money laundering or financing of terrorism or attempts to carry out such operations, and recording them in the Unit's database.
Official Gazette - No. 8 (Repeated) on February 23, 2020
- Conducting investigation and examination work through departments established by the Unit for this purpose, and it may enlist the assistance of state supervisory authorities in this regard.
- Informing the Public Prosecution of the results of investigation and examination indicating evidence of committing a money laundering crime, a financing of terrorism crime, a predicate crime, or any of the crimes stipulated in the Law.
- Requesting the adoption of precautionary measures by investigation authorities as outlined in Articles 208 bis (a), 208 bis (b), 208 bis (c), and 208 bis (d) of the Code of Criminal Procedure, regarding money laundering or financing of terrorism crimes.
- Archiving notifications and information where investigation and examination did not yield evidence of committing a money laundering crime, a financing of terrorism crime, a predicate crime, or any of the crimes stipulated in the Law, provided that the archiving decision includes the justified reasons.
- Establishing a database supplied with all notifications received by the Unit, and all information available to it regarding suspicion of money laundering or financing of terrorism or a predicate crime or any of the crimes stipulated in the Law, and efforts made to combat them locally and internationally, and updating this database periodically, and setting controls and guarantees ensuring the confidentiality of information included in the database.
- Coordinating with state supervisory authorities and competent authorities in foreign countries and international organizations regarding combating money laundering or financing of terrorism.
- The Unit may make the information specified in item (7) available to judicial authorities and state supervisory authorities.
- Exchanging the information specified in item (7) with judicial authorities and state supervisory authorities in accordance with the provisions of the Law, either on its own initiative or upon request by those authorities, to serve the purposes of investigation and examination and taking necessary measures regarding money laundering or financing of terrorism crimes or predicate crimes or any of the crimes stipulated in the Law.
Official Gazette - No. 8 (Repeated) on February 23, 2020
- Exchanging the information specified in item (7) with sister Units and other competent authorities in foreign countries and international organizations, and coordinating with them regarding combating money laundering and financing of terrorism, in application of the provisions of bilateral and multilateral international conventions to which Egypt is a party, or in application of the principle of reciprocity, while observing the guarantees contained in these provisions regarding maintaining the confidentiality of this information and restricting its use to the purpose for which it was provided or requested.
- Developing the forms used by financial institutions and owners of non-financial professions and businesses to notify the Unit of operations suspected of constituting proceeds or involving money laundering or financing of terrorism or attempts to carry out such operations, in a manner that includes all data enabling the Unit to perform investigation and examination, and registration in the database.
- Developing customer due diligence procedures and other rules, controls, and procedures related to combating money laundering and financing of terrorism, and verifying in coordination with supervisory authorities the compliance of financial institutions and owners of non-financial professions and businesses with them.
- Following up with supervisory authorities regarding their establishment and readiness, and providing means to verify the compliance of institutions and entities under their supervision with the laws and rules established by law to combat money laundering and financing of terrorism, including requesting supervisory authorities to take measures regarding any violation of those provisions according to relevant laws and systems.
- Requesting the information, data, statistics, and reports necessary for the Unit to exercise its authorities, from all concerned authorities regarding combating money laundering and predicate crimes associated with it and financing of terrorism, including administrative, financial, and other related information, from state supervisory authorities, financial institutions, owners of non-financial professions and businesses, and any other concerned authorities regarding combating money laundering and financing of terrorism, and following up with these entities to provide the Unit with the requested information, data, and statistics.
Official Gazette - No. 8 (Repeated) on February 23, 2020
- Preparing and implementing qualification and training programs for Unit employees and contributing to preparing and implementing these programs for employees of state supervisory authorities and other competent authorities by law, and financial institutions and owners of non-financial professions and businesses, either directly or by enlisting specialized local and foreign training centers and entities, within the framework of the general qualification and training policy established by the Unit.
- Conducting study, research, and strategic analysis activities regarding notifications and information received by it, and any other information it can obtain, including data from other parties to identify trends and patterns of money laundering and financing of terrorism, as well as following up on developments in this field at the local and international levels, and enlisting the assistance of all concerned parties domestically and internationally.
- Raising public awareness regarding the risks of money laundering and financing of terrorism and the importance of combating them in accordance with the strategy established regarding combating money laundering and financing of terrorism.
- Proposing rules, procedures, and limits to be observed in the disclosure of foreign currency and bearer negotiable instruments carried by persons when entering or leaving the country, provided that the rules and procedures included in Article (14) of these Regulations are observed.
- Preparing means to conclude bilateral or multilateral agreements with foreign countries and organizations in the field of judicial cooperation in all its forms, specifically mutual assistance, judicial delegations, and extradition of suspects and convicts, and execution of final criminal judgments issued by competent foreign judicial authorities in money laundering crimes, predicate crimes associated with them, and financing of terrorism, and seizing and confiscating proceeds from these crimes or their returns.
Official Gazette - No. 8 (Repeated) on February 23, 2020
- Working to conclude bilateral or multilateral agreements with foreign countries regarding the regulation of the disposal of proceeds from assets confiscated by Egyptian or foreign judicial authorities in money laundering crimes, predicate crimes associated with them, and financing of terrorism, including rules for distributing those proceeds among the parties to the agreement.
- Coordinating with judicial authorities and any other competent authority regarding taking necessary legal measures to trace, freeze, or seize assets subject to money laundering crimes, predicate crimes associated with them, and financing of terrorism crimes or their returns, all without prejudice to the rights of bona fide third parties.
- Establishing and preparing means to verify the compliance of all financial institutions and owners of non-financial professions and businesses subject to the Unit's supervision regarding combating money laundering and financing of terrorism with the systems and rules established in this regard, including setting rules, controls, and procedures related to combating money laundering and financing of terrorism.
- Proposing national strategies and policies related to combating money laundering and financing of terrorism.
- Establishing and preparing means to coordinate with all concerned authorities regarding combating money laundering and financing of terrorism to prepare the national risk assessment of money laundering, predicate crimes associated with them, and financing of terrorism, and working to update it periodically, and it may request any information, data, or statistics necessary to prepare or update the assessment.
- Taking necessary measures to implement Egypt's obligations under international conventions, treaties, and charters related to financing of terrorism and financing of the proliferation of weapons of mass destruction, including decisions issued by the Security Council in this regard.
- Giving opinions on draft laws, regulations, controls, rules, and procedures related to combating money laundering or financing of terrorism.
Official Gazette - No. 8 (Repeated) on February 23, 2020
Article (14): In accordance with the provisions of Article (121) of the Law and Article (116) of the Central Bank, Banking System and Currency Law issued by Law No. 88 of 2003, the following provisions apply:
- Importing foreign currency or bearer negotiable instruments into the country is guaranteed for all travelers.
- Exporting foreign currency or bearer negotiable instruments from the country is guaranteed for all travelers, provided it does not exceed ten thousand US dollars or its equivalent in other foreign currencies, with permission at departure for Egyptians to carry the remaining amounts previously disclosed to customs authorities upon arrival, according to what is stated in this Article, if it exceeds ten thousand US dollars or its equivalent in other foreign currencies.
- Every person upon entering the country must disclose to customs authorities in the declaration prepared for that purpose the truth of what they carry exceeding ten thousand US dollars or its equivalent in foreign currency, whether foreign currency, bearer negotiable instruments, or the sum of both.
- Every person upon leaving the country must disclose to customs authorities in the declaration prepared for that purpose the truth of what they carry exceeding five thousand US dollars or its equivalent in foreign currency, whether foreign currency, bearer negotiable instruments, or the sum of both, without prejudice to the provisions of Article (116) of the Central Bank and Currency Law issued by Law No. 88 of 2003 and its amendments.
- Those arriving in or departing from the country may carry Egyptian currency notes or bearer negotiable instruments up to five thousand Egyptian pounds.
- Importing or exporting Egyptian or foreign currency through postal messages and parcels is prohibited.
Official Gazette - No. 8 (Repeated) on February 23, 2020
Disclosure shall be in accordance with the following rules and procedures: (a) Disclosure shall be on a form containing data specified by the Unit, and the Customs Authority shall make these forms available in specific and prominent places in arrival and departure halls at various ports, or distribute them to arrivals and departures. (b) The Customs Authority is the competent customs authority to receive disclosure forms at entry and exit ports, and it must place signs in prominent places at these ports, containing a simple and clear explanation of the disclosure obligation, without prejudice to the provisions of Article (116) of the Central Bank, Banking System and Currency Law issued by Law No. 88 of 2003 and its amendments. (c) The Customs Authority shall appoint a chief contact officer with the Unit in money laundering and financing of terrorism affairs, who must be competent and experienced in these affairs and at an appropriate functional level to perform assigned tasks, and must notify the Unit of the name of its representative and who replaces them in case of absence. (d) Judicial police officers in the Customs Authorities may take the following measures: Questioning the violator about the source of the cash and bearer negotiable instruments in their possession and their intended use in case of failing to fulfill the disclosure obligation, providing incorrect data regarding it, or when there are serious indications that it involves money laundering or financing of terrorism, while seizing the cash and bearer negotiable instruments. Sending the records prepared in this regard to the competent authority to handle them, with providing copies of these records to the Unit. (e) Each customs port is responsible for recording data from disclosure forms of arrivals and departures, and sending this data to the Customs Authority.
Official Gazette - No. 8 (Repeated) on February 23, 2020
(f) The Customs Authority is obliged to immediately send disclosure form data to the Unit according to the system agreed upon between the Unit and the Authority. (g) The Unit shall take appropriate measures regarding entering disclosure data into its database and taking necessary measures in case of suspicion that any of them is related to a money laundering crime, a financing of terrorism crime, or a predicate crime.
Article 22 bis: Customer identification and verification, whether natural, legal, or legal arrangement, shall be conducted in the following cases:
- Establishing a business relationship with the customer.
- Executing an occasional transaction for a customer exceeding 200,000 Egyptian pounds or its equivalent in foreign currency, and this limit may be modified according to the customer due diligence procedures issued by the Unit, provided that in calculating this value, cases where multiple transactions appear related to each other are considered, and financial institutions and owners of non-financial professions and businesses must obtain any information or documents they deem necessary to fulfill or specified by due diligence procedures, even if the transaction does not exceed the mentioned amount.
- Conducting an occasional transaction of any value.
- Suspicion of committing a money laundering crime, predicate crimes associated with it, or financing terrorism, even if the customer conducts an occasional transaction less than the limit specified in item (2) of this Article, provided that in cases where financial institutions or owners of non-financial professions and businesses have reasonable indicators leading them to believe that applying customer identification procedures would reveal this suspicion, they must not apply those procedures and send a suspicion notification to the Unit.
- Doubt about the accuracy of data previously obtained upon customer identification, or estimating the insufficiency of this data and the need to fulfill it.
Official Gazette - No. 8 (Repeated) on February 23, 2020
Article 22 bis (b): Customer identification procedures for the beneficial owner must include the following:
- Identifying the beneficial owner before starting a business relationship with the customer or conducting a transaction for an occasional customer, and taking reasonable measures to verify their identity using information or data from reliable and independent sources.
- Identification procedures regarding the beneficial owner of legal persons and verifying their identity and verifying the identity of each of: (a) Natural persons having a controlling ownership interest in the legal person (if any). (b) Natural persons who do not have a controlling ownership interest in the legal person but exercise control over it through any other means (if any). (c) Persons holding senior management positions in the legal person, in case no persons meeting the conditions in items (a) and (b) of this Article are identified.
- Identification and verification procedures for the beneficial owner regarding investment funds must include the settlor, trustee, protector, beneficiaries, and any other natural person having effective control over the investment fund, as well as persons holding equivalent or similar positions regarding other types of legal arrangements.
Article 22 bis (c): Financial institutions and owners of non-financial professions and businesses must comply with the following:
- In case the financial institution or entity from owners of non-financial professions and businesses is unable to identify and verify the customer's identity, it must not open an account or start, or continue any business relationship with the customer or execute any transactions on their behalf, and consider sending a suspicion notification regarding them to the Unit according to the reasons for not fulfilling those procedures.
Official Gazette - No. 8 (Repeated) on February 23, 2020
- If the financial institution or entity from owners of non-financial professions and businesses is a financial group established in Egypt, it must establish an anti-money laundering and financing of terrorism system at the group level domestically or internationally, applied by all its branches and subsidiaries, including the following: (a) Availability of policies and procedures for exchanging information related to customer identification, verification, and management of money laundering and financing of terrorism risks. (b) Allowing branches and subsidiaries to provide information related to customers, their accounts, and transactions at the group level as a whole, when necessary for anti-money laundering and financing of terrorism purposes, which should include information and analysis of reports or activities that appear unusual (if such analysis is performed), and branches and subsidiaries should receive this information from those group-level functions in accordance with risk management. (c) Establishing sufficient guarantees to maintain the confidentiality of the mentioned information and how it is used.
- A financial institution or entity from owners of non-financial professions and businesses belonging to a financial group established abroad may provide the information mentioned in item (2) of this Article at the group level as a whole, provided all conditions stated in the mentioned item are met.
- Financial institutions and owners of non-financial professions and businesses must update the data, information, and documents obtained upon identification and verification periodically and continuously and appropriately, especially regarding customer categories and high-risk transactions.
- Financial institutions and owners of non-financial professions and businesses must subject current customers to identification and verification procedures as stipulated in Articles (22) to (22 bis c) of these Regulations, based on the risk level of each customer and their relative importance.
Official Gazette - No. 8 (Repeated) on February 23, 2020
- Financial institutions and owners of non-financial professions and businesses must identify and assess money laundering and financing of terrorism risks that may arise from using modern technological systems in providing their services or products, or providing any new services or products relying on these systems, and take appropriate measures to manage those risks, and coordinate with the Unit before providing the mentioned products and services.
- The Bank must establish policies, systems, and procedures to manage risks related to persons and entities listed on negative lists, including disclosing whether the customer or beneficial owner is listed on any negative lists before dealing, while observing re-disclosure upon updating any of those lists and taking necessary measures in this regard, including freezing funds according to the provisions of relevant laws, regulations, and procedures.
Article (23): Each of the supervisory authorities shall take necessary means of office and field supervision to verify the compliance of financial institutions and owners of non-financial professions and businesses under their supervision with the provisions of the Law, its executive regulations, and the supervisory controls issued by them, and customer due diligence procedures, and other rules and procedures related to combating money laundering and financing of terrorism issued by the Unit, relying on the risk-based approach, and taking measures prescribed regarding any violation of those provisions according to laws and rules established by law, either on their own initiative or upon request by the Unit, observing that the penalties stipulated in the Law do not prevent imposing administrative penalties stipulated in laws and systems related to those financial institutions and owners of non-financial professions and businesses. The determination of the periodicity and intensity of office and field supervision for institutions or groups for anti-money laundering and financing of terrorism purposes should be based on: (a) Money laundering and financing of terrorism risks and internal policies, controls, and procedures associated with the institution or group, as specified in the supervisory authority's assessment of the institution or group's risk structure. (b) Money laundering and financing of terrorism risks existing in the country according to the results of the assessment of money laundering and financing of terrorism risks.
Official Gazette - No. 8 (Repeated) on February 23, 2020
Article 34 bis / Second Paragraph Issued: The following controls must be followed when providing the Unit with notifications, information, data, or statistics, including information related to law enforcement and other mentioned information:
( Article Two ) The phrase "two hundred thousand" is replaced by the phrase "one hundred thousand" contained in item (2) of the definition of owners of non-financial professions and businesses from Article (1) of the Executive Regulations of the Anti-Money Laundering Law mentioned.