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The Central Bank of Egypt (CBE) approved new regulatory guidelines for foreign exchange bureaus, aimed at combating money laundering, terrorist financing, and proliferation financing, according to a statement (pdf). The decision scraps the 2008 regulations and gives FX bureaus six months to comply with the new rules.
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But why? The new regulations aim to encourage compliance with amendments made to several legislative and regulatory frameworks, including changes to theAnti-Money Laundering Law and its executive regulations. “This framework comes as part of the central bank’s efforts to keep pace with international standards in combating money laundering, terrorist financing, and proliferation financing, while also consolidating and reinforcing existing best practices in this field,” the statement reads.
The new rules outline requirements for risk-based governance frameworks at exchange bureaus, with board oversight, internal audit mechanisms, and adequate resources to ensure compliance and effective risk management. This also includes appointing a dedicated compliance officer and their deputy.
New risk assessment frameworks are also in the cards: The framework mandates regular risk assessment for money laundering, terrorist financing, and proliferation financing, along with the development of policies, procedures, and internal controls to mitigate these risks.
Bureaus need to be properly assessing their clients: The new rules require detailed customer due diligence, continuously monitor transactions, and report suspicious activities both internally and to the relevant authorities.
How to identify suspicious activity? The framework provides guidance to help identify transactions that may involve illicit activity. It also entails strict recordkeeping and documentation requirements, including minimum retention standards.
Staff training is also on the agenda: Staff will need to receive training, at least once a year, covering anti-money laundering, counter-terrorist financing, and combating proliferation financing.
