8 July 2010
CIRCULAR BM 1073
To: All
Licensed Banks
Operating
in the Sultanate of
After Compliments,
Re: Law of Combating Money Laundering and Terrorism Financing
1. Reference is invited to Circulars BM 936
dated 7th April 2002 and BM 940 dated 24th July 2002 on
Money Laundering Law issued pursuant to Royal Decree 34/2002.
2. Attached is copy of Royal Decree 79/2010
(Arabic and English), issued on 28th June 2010, promulgating Law of
Combating Money Laundering and Terrorism Financing, gazetted on 3rd
July 2010 and effective from 4th July 2010.
Please note that the attached English translation is
unofficial and provisional only.
3. Central Bank of
i) As stated in Article 2 of the Royal Decree
79/2010, the provisions of Executive Regulation issued in terms of the earlier
Money Laundering Law, shall remain effective till such time Minister of
National Economy issues the Executive Regulation under the new Law, unless they
contravene the provisions of this Law.
ii) While
elaborating and widening the focus, coverage, and importance on the subject, the Law, it may be
observed, is comprehensive and self-explanatory.
iii) The
following require special mention.
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a) Predicate offence, as stated, covers all
offences which violate the applicable laws in the Sultanate and enable their
perpetrators to obtain the proceeds of the offences.
b) Terrorism Financing
offence receives special and separate mention and coverage (in addition to
money laundering).
c) Non-financial businesses and professions,
non-profit Associations and bodies, besides financial institutions, are
identified widely.
d) Persons on whom the guilt of offence and
punishments will fall are elaborately covered.
Persons
at risk by virtue of their positions require extra attention.
e) Financial Intelligence Unit, under Royal Oman
Police, assumes required powers with authority to receive and analyze reports,
investigate and follow up with actions. It can take more stringent/extended
actions with authority from the Public Prosecution.
f) Article 12 covers the duties and
responsibilities of financial institutions on the subject.
They
are required, among others, to comply with the following:
§
Ensuring that counterparties have physical presence in the
countries they are registered and are regulated.
§
Due Diligence should be extended to obtaining identity
details, verification and updating identities and should cover ultimate
beneficiaries.
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§
There shall be no anonymous, numbered or disguised
accounts.
§
There shall be monitoring of transactions on on-going basis
to verify source of funds and ensure conformity with customer profile.
§
There shall be classification of customers according to
corresponding risks and there shall be commensurate tiered levels of enhanced
diligence.
§
Records and information need to be kept for 10 years, as
specified and they should be provided to competent authorities, upon request.
§
There shall be appropriate oversight of overseas branches
for compliance.
§
Financial Intelligence Unit shall be provided with
Suspicious Transaction Reports and other requirements directly.
§
There shall be required systems, procedures, compliance
infrastructure, control and training in accordance with established
specifications.
g) Wire transfer transaction requirement has been
covered to obtain and retain identity particulars of the originator also.
h) Notwithstanding the customer confidentiality
provisions, disclosure of suspicious transactions and relevant information and
records is required, as stipulated.
i) Disclosure of information, on specified
actions under the Law to other than competent authorities is prohibited.
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j) Actions in good faith are given protection.
k) Roles of competent regulatory authorities and
National Committee on Combating Money Laundering and Terrorism Financing are
amplified.
The
emphasis is on cooperation and coordination among relevant authorities.
l) Penalties have been spelt out clearly,
depending upon the nature and seriousness of violations.
Besides
the Chairmen, Directors, employees etc., of the erring institutions, the
institutions themselves shall be subjected to penalties. Those will include curbs on licenses and
activities.
m) There is continued commitment of the Sultanate
to international cooperation, covering, among others, cross-border assistance
in combating money laundering and terrorism financing and mutual legal
assistance.
4. All licensed banks are advised to ensure
compliance in all respects, making suitable reviews and changes in their
policies, systems, procedures etc., and continuing interactive process with the
authorities.
They should note that instructions and
requirements issued earlier, under various laws including the Banking Law and
not contravening this Law, remain valid and licensed banks shall keep up
compliance accordingly on combating money laundering and countering terrorism
financing.
Hamood
Sangour Al Zadjali
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