The United Nations Office of Drugs and Crimes (UNODC) in its 2005 country profile report states that the laws governing Anti-Money Laundering (AML) in Egypt are the AML Law No. 80 of 2002 (amended in 2003), and the Central Bank Law No. 88 of 2003. The report further indicates that the Financial Action Task Force (FATF) removed Egypt from its non-cooperating countries or territories list in 2004 owing to Egypt's continued efforts toward developing an effective AML and terrorist financing regime which the authorities indicated will incorporate the FATF recommendations. According to a 2007 U.S. Department of State (DoS) report, the AML Law clearly defines the predicate crimes associated with money laundering. However, it does not specifically address the rules on confiscation and seizure of assets derived from money laundering. The report further notes that confiscation rules are addressed in the Penal Code, which allows for seizure of assets related to predicate crimes, including terrorism, and that Egyptian authorities intend to update its old counterterrorism law with a new one which would include more specific measures against terrorist financing. The 2005 UNODC report describes Egypt as not being a regional financial center or an offshore financial sector and asserts that the Central Bank of Egypt and other financial regulatory bodies have been actively involved in issuing regulations related to "Know Your Customer" and "Suspicious Transaction" reporting requirements. Egypt is a founding member of the Middle East and North Africa Financial Action Task Force and has ratified the United Nations Convention against Transnational Organized Crime and the UN International Convention for the Suppression of the Financing of Terrorism. In spite of the above information, there is no comprehensive assessment publicly available that addresses Egypt's compliance with the FATF's recommendations.

General Overview

The United Nations Office of Drugs and Crimes (UNODC), in its 2005 country profile report, noted that in June 2001 the Financial Action Task Force (FATF) included Egypt in its non-cooperating countries or territories (NCCT) list. However, in February 2004, owing to Egypt's continued efforts toward developing an effective Anti-Money Laundering (AML) and terrorist financing regime which will incorporate the Financial Action Task Force (FATF) recommendations, the FATF removed Egypt from its NCCT list. According to information provided in a 2005 World Bank report, subsequent to the International Monetary Fund's (IMF) 2002 Financial Sector Assessment Program (FSAP) of Egypt, the authorities implemented several reform measures which included the "fulfillment of all legal and institutional requirements in accordance with the FATF recommendations and measures" (p. 17). However, apart from this statement there is no further information in the World Bank report as to Egypt's compliance with the FATF recommendations.

The 2005 UNODC report describes Egypt as not being a regional financial center or an offshore financial sector. The report states that the laws governing Anti-Money Laundering (AML) in Egypt are AML Law (No. 80, 2002), which was amended in 2003, and the Central Bank Law (No. 88. 2003). According to a 2007 U.S. Department of State (U.S. DoS) report, the AML Law clearly defines the predicate crimes associated with money laundering. However, it does not specifically address the rules on confiscation and seizure of assets derived from money laundering. Confiscation rules are addressed in the Penal Code, which allows for seizure of assets related to predicate crimes, including terrorism (U.S. DoS 2007). The U.S. DoS report indicates that Article 86 of the Penal Code criminalizes the financing of terrorism; however, the authorities' intend to replace its old counterterrorism law with a new one which would include more specific measures against terrorist financing.

The AML law also established Egypt's Financial Intelligence Unit (FIU), known as the Money Laundering Combating Unit, or MLCU, which came into operation in 2003. The 2007 U.S. DoS report states that the MLCU is an independent body functioning within the Central Bank of Egypt (CBE), possessing its own budget and staff. As per the report, other bodies responsible for regulating money laundering activity include the Ministry of Interior, the National Security Agency, and the Administrative Control Authority.

According to information provided in the 2007 U.S. DoS report, banks, securities markets, independent brokers, and insurance companies are regulated by the AML Law. The 2005 UNODC report notes that the Central Bank of Egypt and other financial regulatory bodies have been actively involved in issuing regulations related to Know Your Customer (KYC) and Suspicious Transaction Reporting (STR) requirements. However, in 2007, the U.S. DoS reported that other professions, such as lawyers, accountants, and cash couriers were not as yet subject to AML controls.

According to the U.S. DoS 2007 report, Egypt has entered into a Mutual Legal Assistance Treaty with the United States, and has similar agreements with the UK, Romania, Zimbabwe, and Peru. The report adds that the CBE circulates the names of suspected terrorists and terrorist organizations on the United Nations Security Council Resolution (UNSCR) 1267 Sanctions Committee's consolidated list to all financial institutions. The report also indicates that Egypt follows the Middle East and North Africa Financial Action Task Force (MENAFATF) recommendations on anti-money laundering and counterterrorist financing, is a party to the United Nations Drug Convention, and has ratified both the UN Convention against Transnational Organized Crime and the UN International Convention for the Suppression of the Financing of Terrorism.

The Principles

1. Legal Systems and Related Institutional Measures

II

The 2005 UNODC report states that the laws governing Anti-Money Laundering (AML) in Egypt are AML Law No. 80 of 2002, as amended in 2003, and the Central Bank Law No. 88 of 2003. According to the 2007 U.S. DoS report, the authorities intend to replace its old counterterrorism law with a new one which would include more specific measures against terrorist financing. Furthermore, according to information provided in a 2005 World Bank report, subsequent to the International Monetary Fund's (IMF) 2002 Financial Sector Assessment Program (FSAP) of Egypt, the authorities implemented several reform measures which included the "fulfillment of all legal and institutional requirements in accordance with the FATF recommendations and measures" (p. 17). However apart from this statement there is no further information in the World Bank report as to Egypt's compliance with this principle.

According to the 2007 U.S. DoS report, the AML Law criminalizes money laundering in Egypt, and Article 86 of the Penal Code criminalizes the financing of terrorism. The U.S. DoS report states that the AML law clearly defines the predicate crimes associated with money laundering. However, it does not specifically address the rules on confiscation and seizure of assets derived from money laundering. Confiscation rules are addressed in the Penal Code, which allows for seizure of assets related to predicate crimes, including terrorism (U.S. DoS 2007).

As per information provided in the 2007 U.S. DoS report, the AML law also established Egypt's Financial Intelligence Unit (FIU), which is known as the Money Laundering Combating Unit, or MLCU, and which came into operation in 2003. The 2007 U.S. DoS report indicates that the MLCU is an independent body, functioning within the Central Bank of Egypt (CBE) and possessing its own budget and staff. Other bodies responsible for regulating money laundering activity include the Ministry of Interior, the National Security Agency, and the Administrative Control Authority. According to the 2007 U.S. DoS report, the AML law clearly defines the role of these supervisory authorities and establishes the authority of the MLCU. The report also indicates that the MLCU, since its inception, has received over one thousand STRs and has brought several cases to court.

The Government of Egypt established a national committee for coordinating issues regarding anti-money laundering in late 2005. The 2007 U.S. DoS report identifies this as the National Committee for Combating Money Laundering and Terrorist Financing, which includes representatives from the MCLU, the Ministries of Interior, Foreign Affairs, Social Affairs, Justice, and the National Security Agency. The 2007 U.S. DoS also mentions the National Committee for International Cooperation in Combating Terrorism (established in 1998) which includes the same agencies performs the same function. Finally, the report notes that Egypt is a party to the United Nations Drug Convention and has ratified both the UN Convention against Transnational Organized Crime and the UN International Convention for the Suppression of the Financing of Terrorism.

2. Preventive Measures - Financial Institutions

II

According to information provided in the 2007 U.S. DoS report, the AML law mandates that banks: (1) maintain records of customers for 5 years; (2) maintain internal systems ensuring compliance with the AML law; (3) voluntarily report suspicious transactions; (4) examine large transactions; and (5) produce quarterly compliance reports. The report also notes that the AML law prohibits anonymous financial accounts (U.S. DoS 2007). Moreover, the 2005 UNODC report states that the Central Bank of Egypt and other financial regulatory bodies have been actively involved in issuing regulations related to Know Your Customer (KYC) and Suspicious Transaction Reporting (STR) requirements. However there is insufficient information publicly available as to Egypt's compliance with the FATF recommendations relating to this Principle.

The CBE with the MLCU monitors the banking sector and also the bureaux de change and money transmission companies for foreign exchange control purposes, according to the 2007 U.S. DoS report. The CBE jointly with the MLCU undertook a self assessment in 2006 of the banking sectors AML systems and found that only one bank was noncompliant, and that, in the case of deficiencies, the CBE notified the banks as to the course of corrective measures to be undertaken (U.S. DoS 2007). The U.S. DoS 2007 report also indicates that the CBE and the MLCU plans to continue to undertake comprehensive periodic assessments and follow-up visits and that MLCU, since its inception, has received over thousand STRs and has brought several cases to court.

Securities markets, firms, and independent brokers are regulated by the Capital Market Authority (CMA), and insurance companies are regulated by an independent insurance regulatory authority, according to the 2007 U.S. DoS report. The report further indicates that the General Authority for Free Zones and Investment (GAFI) regulates activity in free zones and Special Economic Zones (SEZ), and the Postal Authority's financial services is regulated by the Ministry of Communication and Information Technology.

According to the 2007 U.S. DoS report, the AML Law requires that foreign currency equivalent to $10,000 or more that enters the country be declared at the borders, and offshore banks, international business companies, and shell companies are not permitted in the country.

3. Preventive Measures - Designated non-Financial Business and Professions

II

According to the 2007 U.S. DoS report, all cash transactions at casinos are performed by licensed banks subject to AML controls, although other professions such as lawyers, accountants, and cash couriers, are not currently subject to AML controls. Nevertheless, the DoS report mentions that MLCU officials have indicated that the law will soon be amended to cover the activities of these individuals. However, there is insufficient information publicly available as to Egypt's compliance with the FATF recommendations relating to this Principle.

4. Legal Person and Arrangements & Non-Profit Organizations

II

There is insufficient information publicly available as to Egypt's compliance with the FATF recommendations relating to this Principle. However, in its 2007 report, the U.S. DoS notes that, in 2002, "the Government of Egypt passed the Law on Civil Associations and Establishments (Law No. 84 of 2002), which governs the procedures for establishing nongovernmental organizations (NGOs), including their internal regulations, activities, and financial records." The report further notes that this law restricts the acceptance of foreign donations without prior permission and "Ministry of Social Solidarity and the CBE continually monitor the operations of domestic NGOs and charities to prevent the funding of domestic and foreign terrorist groups."

5. National and International Co-operation

II

There is insufficient information publicly available as to Egypt's compliance with the FATF recommendations relating to this Principle. However, the U.S. DoS report of 2007 notes that the National Committee for Combating Money Laundering and Terrorist Financing, which includes representatives from the MCLU, the Ministries of Interior, Foreign Affairs, Social Affairs, Justice, and the National Security Agency, was formed in 2005 and is responsible for coordinating policy between these agencies.

According to the U.S. DoS report of 2007, the Government of Egypt, owing to its own problems with terrorism, is keen on international cooperation on issues of terrorism and has cooperated with foreign authorities in this regard. The National Committee for International Cooperation in Combating Terrorism (established in 1998) coordinates policy on antiterrorism between the national agencies.

Egypt has entered into a Mutual Legal Assistance Treaty with the United States, and has similar agreements with the UK, Romania, Zimbabwe, and Peru (U.S. DoS 2007). According to the U.S. DoS report, the CBE circulates names of suspected terrorist and terrorist organizations on the UNSCR 1267 Sanctions Committee's consolidated list to all financial institutions. The report also indicates that Egypt follows the Middle East and North Africa Financial Action Task Force (MENAFATF) recommendations on anti-money laundering and counterterrorist financing. Egypt is a party to the United Nations Drug Convention, and has ratified both the UN Convention against Transnational Organized Crime and the UN International Convention for the Suppression of the Financing of Terrorism.