Anti Money Laundering (AML) in Egypt

In 2005, the Government of Egypt (GOE) sustained financial sector reforms that were initiated in 2004, with the aim of streamlining the financial sector. Despite this reform, Egypt is still largely a cash economy, and many financial transactions do not enter the banking system.

Money laundering and terrorist financing are not considered to be widespread in Egypt. However, informal remittance systems are unregulated and therefore pose a potential means for laundering funds. Many overseas workers use informal means to remit earnings, due to a lack of trust in, or familiarity with banking procedures. As a result of the unregulated nature of informal remittance systems, it is unclear if, and to what extent, money laundering actually occurs through these systems.

In May 2002, Egypt passed the Anti Money Laundering (AML) Law No. 80 of 2002. The Law criminalizes the laundering of funds from narcotics trafficking, prostitution and other immoral acts, terrorism, antiquities theft, arms dealing, organized crime, etc. The Law did not repeal Egypt’s existing law on bank secrecy, but it did provide the legal justification for providing account information to responsible civil and criminal authorities. In addition, the Law also provided for the establishment of the Money Laundering Combating Unit (MLCU) as Egypt’s Financial Intelligence Unit (FIU), which officially began operating on March 1, 2003.

In June 2003, the administrative regulations of the Anti Money Laundering (AML) Law were issued as Prime Ministerial Decree No. 951/2003. The regulations provided the legal basis by which the MLCU derives its authority, spelled out the predicate crimes associated with money laundering, established a board of trustees to govern the MLCU, defined the role of supervisory authorities and financial institutions, and allowed for the exchange of information with foreign competent authorities.

In 2009, the Government of Egypt created the Financial Supervisory Authority (FSA). The primary role of the FSA is to regulate non-banking financial markets and instruments.

AML Training in Egypt

The passing of Egypt's Anti Money Laundering Law made it a requirement for financial institutions in the country to develop appropriate training programs to combat money laundering.

The Economy of Egypt

Egypt’s economy is involved in a range of activity including agriculture, textiles, tourism and some industry. Despite having only 5% of fertile soil, the economy’s main source of income is derived from its farming industry.

In previous years, Egypt has experienced a strong economic growth, however, the country as a whole has been unsuccessful in bridging the gap between its extremely wealthy population and its extremely poor population. Although the standard of living is considered to be poor and the government continues to subsidize basic necessities, an increasing number of residents can be classified as middle class or rich.

The Government of Egypt has worked hard to meet the demands of Egypt's growing population, which is the largest in the Arab world. As the country continues to grow, the government must focus on improving its economic conditions, as well as maintaining its vigorous pursuit of economic reforms.

Banking In Egypt

The Central Bank of Egypt (CBE) was established in 1961. The main objectives and functions of the CBE are regulating banks and the banking system, implementing banking, monetary and credit policy, issuing bank notes, managing gold and foreign exchange reserves, regulating and managing Egypt’s presence in the foreign exchange market, supervising the national payments system and managing public and private external debt.

The National Bank of Egypt (NBE) is the oldest and one of largest banks in Egypt with over 400 branches, as well as having subsidiary locations abroad. During the 1950s NBE acted as the central bank to Egypt, but currently retains its duties as the premier commercial bank in the region.

Egyptian Currency

The Egyptian pound is the official currency of Egypt. Egyptian money is colorful in design and the size of Egypt’s paper money decreases as it decreases in denomination.

Banknotes are available in denominations of 25 and 50 piastres and 1, 5, 10, 20, 50, 100 and 200 pounds. Coins are available in 5, 10, 25, 50 piastres and 1 pound.

Other Key Statistics of Egypt

Time Zone: UTC+2 (7 hours ahead of Washington, DC during Standard Time).

Location: Northern Africa, bordering the Mediterranean Sea, between Libya and the Gaza Strip, and the Red Sea north of Sudan, and includes the Asian Sinai Peninsula.

Population: 86,218,547 (June 2015 est.)

Labor Force: Approximately 13.8% work in agriculture, 41.1% in industry and 45.1% in services industries. The unemployment rate is 9.1%.

Languages Spoken: Arabic (official), English and French widely understood by educated classes.

Anti Money Laundering (AML) in Italy

Money laundering occurs both in the regular banking sector and, more frequently, in the non-bank financial system, i.e., casinos, money transfer houses and the gold market. Money launderers predominantly use non-bank financial institutions for the illicit export of currency – primarily U.S. dollars and Euros – to be laundered in offshore companies. There is a substantial black market for smuggled goods in the country, but it is not funded significantly by narcotics proceeds.

Law 197/31 defined money laundering as a criminal offense when it relates to a separate, intentional felony offense. Italy has strict laws on the control of currency deposits in banks. Banks must identify their customers and record and report to Italy’s Financial Intelligence Unit (FIU), Italian Exchange Office (UIC), any cash transaction that exceeds approximately $15,000. The Bank of Italy’s mandatory guidelines require the reporting of all suspicious cash transactions and other activity, such as a third-party payment on an international transaction, on a case-by-case basis. Italian law prohibits the use of cash or negotiable bearer instruments for transferring money in amounts in excess of $15,000, except through authorized intermediaries or brokers.

Banks and other financial institutions are required to maintain records necessary to reconstruct significant transactions for ten years, including information about the point of origin of funds transfers and related messages sent to or from Italy. Banks operating in Italy must remit account data to a central archive controlled by the Bank of Italy. This archive was established for recordkeeping and financial oversight purposes, but has proven useful for tracking money laundering. A "banker negligence" law makes individual bankers responsible if their institutions launder money. The law protects bankers and others with respect to their cooperation with law enforcement.

AML Training in Italy

Italy’s Operating Instructions for Identifying Suspicious Transactions requires financial intermediaries to provide their employees with AML training. Reports on training must be submitted annually to the intermediary’s Board of Directors.

The Economy of Italy

Italy has a diversified industrial economy with roughly the same total and per capita output as France and the UK. This capitalistic economy remains divided into a developed industrial north, dominated by private companies, and a less-developed, welfare-dependent, agricultural south. Most raw materials needed by industry and more than 75% of energy requirements are imported.

The strength in the Italian economy stems from the processing and manufacturing of goods, mostly by medium-sized and family-owned firms.

Banking in Italy

Banca d’Italia is a member of the European Central Bank (ECB). The ECB is the central bank of Europe’s main currency, the Euro. The ECB’s primary responsibility is to maintain the purchasing power of the Euro.

The main functions of Italy’s Central Bank are to promote financial stability in the country and monitor banking and financial policies.

The monetary functions of the ECB include: the opening of accounts for credit institutions, public entities and other market entities; the opening of market and credit operations; requiring credit institutions to hold minimum reserves, regulating to create an efficient and sound clearing and payments system; and cooperating with third country central banks, credit institutions and international organizations.

The ECB has the exclusive right to set interest rates for the Eurozone.

Italy's Currency

The currency in Italy is the Euro, which serves as the currency of the 15 members of the European Central Bank. The states that have adopted the Euro as currency make up the Eurozone. These countries are Austria, Belgium, Cyprus, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Spain. The Euro is the single currency for more than 320 million Europeans.

The Euro was first phased into the global economy in 1999. In the beginning, participating countries had to combat the use of both Euros and former national currencies. Beginning in 2002, national currencies were withdrawn.

The Euro comes in both banknotes and coins. Banknotes are available in 5, 10, 20, 50, 100, 200 and 500 denominations. Coins are available in 1, 2, 5, 10, 20, 50 cent pieces, and 1 and 2 Euro coins.

Other Key Statistics of Italy

Time Zone: UTC+1 (6 hours ahead of Washington, DC during Standard Time).

Daylight Savings Time: +1hr, begins last Sunday in March; ends last Sunday in October.

Location: Southern Europe, a peninsula extending into the central Mediterranean Sea, northeast of Tunisia.

Population: 60,396,852 (June 2015 est.).

Labor Force: Approximately 5% works in agriculture, 32% in industry and 63% in services industries. The unemployment rate is 6.2%.

Languages Spoken: Italian (official), German, French and Slovene.

Trade Organizations: Italy is a member of the World Trade Organization (WTO).

Anti Money Laundering (AML) in Lebanon

Money laundering is a minor problem in Lebanon. Banking sources emphasize that Lebanon is not a significant financial center for money laundering, but acknowledge that it does have a number of vulnerabilities. Lebanon imposes no controls on the movement of capital. It has a substantial influx of remittances from expatriate workers and family members.

In 2001, Lebanon enacted Law No. 318, which created a framework for lifting bank secrecy, broadening the criminalization of money laundering beyond drugs, mandating suspicious transaction reporting, requiring financial institutions to obtain customer identification information, and facilitating access to banking information and records by judicial authorities. The law was amended in 2003 to criminalize terrorist financing.

The provisions of Law No. 318 expand the type of financial institutions subject to the provisions of the Banking Secrecy Law of 1956 to include institutions such as exchange offices, financial intermediation companies, leasing companies, mutual funds, insurance companies, companies promoting and selling real estate and construction, and dealers in high-value commodities. In addition, Law No. 318 requires companies engaged in transactions for high-value items (e.g., precious metals or antiquities) and real estate to report suspicious transactions.

All financial institutions and money exchange houses are regulated by the Central Bank. Law No. 318 clarified the Central Bank’s powers to require financial institutions to identify all clients (including transient clients), maintain records of customer identification information, request information about the beneficial owners of accounts, conduct internal audits, and exercise due diligence in conducting transactions for clients.

AML Training in Lebanon

Under Lebanon's Regulations on the Control of Financial and Banking Operations for Fighting Money Laundering, financial institutions must ensure that all staff members participate in training to remain up-to-date on the latest AML developments.

The Economy of Lebanon

The 1975-1990 civil war seriously damaged Lebanon's economic infrastructure, cut national output by half, and all but ended Lebanon's position as a Middle Eastern entrepot and banking hub. In the years since, Lebanon has rebuilt much of its war-torn physical and financial infrastructure by borrowing heavily - mostly from domestic banks.

Banking In Lebanon

The Central Bank of Lebanon, Banque du Liban (BDL), controls bank liquidity by adjusting discount rates, intervening in the open market, and determining credit facilities to banks and financial institutions. It regulates banks' credit in terms of volume and types of credit, by imposing a credit ceiling, by directing credits toward specific purposes or sectors, and by setting the terms and regulations governing credits in general.

The Central Bank imposes on banks reserve requirements, as well as penalties should shortfalls occur.

The BDL grants licenses for the establishment of banks, financial institutions, brokerage firms, money dealers, foreign banks, leasing companies and mutual funds in Lebanon. The Banking Control Commission controls and supervises these institutions. Conferring with the Association of Banks, the BDL issues circulars and resolutions governing the relations of banks with their customers.

Lebanon's Currency

The legal tender is the Lebanese pound. There are 14 denominations of banknotes issued by the Central Bank: the LBP 1, 5, 10, 25, 50, 100, 250, 500, 1,000, 5,000 10,000, 20,000, 50,000 and 100,000.

Coins are found in denominations of 50, 100, 250, and 500 pounds, as well as piastres coins in 5, 10, 25 and 50.

Other Key Statistics of Lebanon

Time Zone: UTC+2 (7 hours ahead of Washington, DC during Standard Time). Daylight saving time: +1hr, begins last Sunday in March; ends last Sunday in October.

Location: Middle East, bordering the Mediterranean Sea, between Israel and Syria.

Population: 4,461,838 (June 2015 est.).

Labor Force: The unemployment rate is 20%.

Languages Spoken: Arabic (official), French, English, Armenian.

Trade Organizations: Lebanon is an observer of the World Trade Organization (WTO).