Egypt so fresh and so clean
Gamal Essam El-Din reports on the positive effects of the recent decision to lift Egypt's name from its blacklist of countries failing to cooperate in fighting money laundering activities
On 27 February a task force fighting money laundering removed Egypt from its blacklist of countries failing to sufficiently fight the crime. "As a result of the implementation of significant reforms to its anti- money laundering system, Egypt was removed from the list," a statement by the task force said.
The Paris-based Financial Action Task Force (FATF) also removed Ukraine from the blacklist of countries deemed uncooperative in the fight against money laundering.
The decision came after a FATF delegation visited Egypt in the first 10 days of February to survey the measures which the country adopted for implementing its two- year old law aimed at cracking down on money laundering activities. The FATF delegation visited the Anti-Money Laundering Unit to observe first hand the government's will in cracking down on dirty money.
"They visited the Central Bank and paid other surprise visits to four banks and saw how internationally-formulated rules on money disclosure are strictly implemented by the banks," Sirriam Siam, chairman of Egypt's Anti-Money Laundering Unit, said in a press announcement. Siam also revealed that the FATF delegation (including financial experts from Great Britain, France, Holland, Italy and the United States) assessed the success achieved in thwarting two attempts to launder money in Egypt.
Siam explained that the Anti-Money Laundering Unit is also closely cooperating with the Capital Market Authority to watch for any suspicious activities. "The FATF delegation visited the capital market, Cairo's securities market, Misr Clearance Company and 200 brokerage companies to see how all these entities comply with the world's anti-money laundering systems," Siam said. "All in all, the FATF said Egypt is now implementing almost 99 per cent of the internationally- recognised measures in the area of combating money laundering activities."
Egypt was blacklisted in June 2001 and had struggled to change its status since. In May 2002, the People's Assembly overwhelmingly to pass Egypt's first-ever law against money laundering. The law grants the government increased powers to track and freeze funds and assets and to report suspect financial transactions to foreign countries and internal agencies. At its last meeting, held in the summer of 2003, the FATF hailed the progress that Egypt had made by passing new, tougher legislation, but added that it wanted to make sure laws were enforced.
The government quickly responded by passing the law's executive regulations and completing the infrastructure of the Anti-Money Laundering Unit. Authorised by a special presidential decree, this unit serves as a task force at the Central Bank of Egypt (CBE). Employees of various other government agencies, probably including intelligence agencies, work with the unit. The unit is also in charge of receiving reports submitted by financial institutions regarding suspected money laundering and providing the information to state supervisory agencies, foreign countries and international organisations. It may also pass evidence on to the prosecutor-general. The task force is also committed by law to submitting an annual report to the People's Assembly about money laundering activities in Egypt (though this has never happened yet).
Siam hailed the FATF's decision, emphasising that "being on the list affects the reputation and integrity of the whole economy". Parliament Speaker Fathi Sorour said the FATF's decision is the fruit of many government bodies, especially parliament. "Lawmakers have passed corresponding legislation in May 2002 and real efforts have been taken since then to effectively combat money laundering," Sorour said.
CBE Governor Farouk El-Okdda said that FATF's decision is expected to attract greater foreign investments to Egypt and ensure that a more cooperation will take place with international financial institutions and funds. For example, El- Okdda indicated that the FATF's decision allow more laundered payments for antiquities and drug to be restored to Egypt.
Siam also reported that the FATF's announcement coincides with a US decision to grant Egypt membership in the International Federation of Anti-Money Laundering Task Forces. This 65-member federation aims at tracking illegal money laundering, specifying the crimes behind money-laundering offences, and formalising procedures at financial institutions to identify the customers behind transactions. Via this federation, Siam added, Egypt is trying to be the Middle East and North Africa's hub for anti-money laundering activities.
Siam, however, indicated that anti- money laundering activities also primarily include operations aimed at funding terrorist organisations such as Osama Bin Laden's Al-Qa'eda. Siam, however, argued that the Palestinian organisations struggling against the Israeli occupation can never be branded as terrorist entities. "For this reason, money donated to the Palestinian Intifada is not part of terrorist- funding activities targeted by the anti- money laundering measures," Siam said.
Egyptian studies have calculated that money laundered in Egypt is around $5 billion (around five per cent of GDP), $3 billion of which is generated by drug trafficking.
