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Egypt

Last updated: 29/04/2009

CENTRAL AUTHORITY FOR REPORTING

Money Laundering Combating Unit (MLCU)

According to Anti-money Laundering Law No. 80 of 2002, and its Executive Regulations issued pursuant to the Egyptian Prime Ministerial Decree No. 951/2003, as amended, MLCU is an independent unit functioning within the Central Bank of Egypt (CBE).

MLCU receives all reports concerning money laundering activities and crimes and reports any investigation results to the Public Prosecution. All received reports and gathered information concerning money laundering and terrorism financing activities are recorded in its database.

MLCU sets the regulations and guarantees secrecy. The Unit also exchanges information related to its activities with others, such as supervisory and competent authorities inside and outside Egypt, and sets the regulations required to verify the legal status of customers and beneficiaries, be they natural or juridical persons, through legal identification documents.

OTHER ANTI-MONEY LAUNDERING REGULATOR(S)

There are two other types of anti-money laundering regulators:

Supervisory Authorities

  • Ministry of Communications and Information Technology (MCIT).

    MCIT supervises the postal saving funds.

  • Central Bank of Egypt (CBE).

    CBE supervises banks operating inside the Arab Republic of Egypt (ARE) and their branches abroad, foreign exchange entities and the entities licensed to deal in foreign currency and money transfers.

  • Financial Supervisory Authority (FSA).

    FSA was established by virtue of the provisions of Law No.10 of 2009, regulating control on non-Banking Financial Markets and Instruments, and supervises entities performing activities in the field of insurance and reinsurance, private insurance funds, brokerage in the field of insurance, as well as supervision over entities working in any field of securities, receipt of money, securitization and mortgage activities.

  • General Authority for Investment and Free Zones (GAFI).

    GAFI supervises entities practicing lease finance activities and factoring activities.

  • Any other Supervisory Authority which may be specified by a Decree issued by the Prime Minister.

    Accordingly, the Prime Minister issued Decree No. 2676 for the year 2008 authorizing the Ministry of Trade and Industry (MTI) to be a Supervisory Authority, supervising the entities performing transactions regarding valuable metals and precious stones, as well as real estate brokerage activities.

The Public Control Entities which include the following:

ARE LAWYERS COVERED BY ANTI-MONEY LAUNDERING LEGISLATION?

Lawyers are covered by the Egyptian Anti-money Laundering Legislation similarly to natural or juridical persons. Lawyers may not rely on client / attorney privilege as regards any suspected transaction that falls under Anti-money Laundering Law discovered during the performance by the lawyer of his/her duties.

LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.

There is no Egyptian legislation specifically applicable to lawyers. However, the applicable legislation concerning anti-money laundering is listed below:

  1. Anti-Money Laundering Law No. 80 of 2002 and as amended;

  2. Prime Minister's Decree No. 951 of 2003, issuing the Executive Regulation of the Anti-Money Law as amended;

  3. Presidential Decree No. 164 of 2002 organizing MLCU;

  4. Presidential Decree No. 28 of 2003 organizing the functions and officials at the Money Laundering Combating Unit;

  5. Prime Minister's Decree No. 2676 of 2008, adding other entities to the list of financial entities listed in the Anti-money Laundering Law;

  6. The Central Bank, Banking System and Currency Law No. 88 of 2003 as amended;

  7. Presidential Decree No. 101 of 2004 issuing the Executive Regulation of Law No. 88 of 2003;

  8. Presidential Decree No. 64 of 2004 issuing the statutes of CBE;

  9. Law No. 146 of 1988 regarding Companies Receiving Money for Investment thereof;

  10. Presidential Decree No. 520 for the year 1979, establishing the CMA;

  11. Capital Market Law No. 95 for the year 1992 and as amended;

  12. The Minister of Foreign Trade’s Decree No. 906 for the year 2001 issuing the Executive Regulations of the Capital Market Law as amended;

  13. The Minister of Investment’s Decree No. 243 for the year 2006 regarding Egyptian Accounting Standards;

  14. The Minster of Investment’s Decree No. 166 for the year 2008 regarding the Egyptian Specific Auditing Standards;

  15. Law No. 362 for the year 1996 regarding the Supervision and Control of Insurance as amended;

  16. The Minister of Economy and International Cooperation’s Decree, issuing the Executive Regulations of the Supervision and Control of Insurance as amended;

  17. Law No.10 for the year 2009 organizing control over Non-Banking Markets Financial Instruments;

  18. Presidential Decree No. 294 for the year 2003 approving the United Nations Convention against Transnational Organized Crime;

  19. Presidential Decree No 307 for the year 2004 providing for the accession by Egypt to the United Nations Convention against Corruption. 

ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?

Yes, visiting lawyers (i.e. foreign lawyers visiting ARE) shall comply with the provisions of the Anti-money Laundering Legislation throughout the period of their visits.

For example, according to the provisions of the Anti-money Laundering Law, lawyers, like any natural person, when travelling to and from the ARE, shall declare to the CA their possession of foreign currency, securities and commercial instruments, where the total value exceeds USD 10.000 (Ten Thousand U.S. Dollars) or the equivalent in foreign currency, where the foreign currency exceeds such value. 

LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.

There are no specific guidelines for lawyers on the Egyptian legislation regarding Anti-money Laundering except for the provisions related to the client / attorney privilege as described above.  

IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?

According to the Law No. 17 of 1983 concerning Practice of the Legal Profession, the Lawyers’ Bar Association is an independent entity. But, it is bound by Egyptian legislation which includes Anti-money Laundering laws.

Therefore, the Lawyers’ Bar Association shall report to MLCU any information regarding suspicious transactions performed by lawyers with regards to money laundering.   

DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.

Lawyers are not currently subject to any client due diligence requirements.

DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?

Not applicable.

ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?

Not applicable.

ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?

Not applicable. 

ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.

Not applicable. 

WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?

As mentioned above, lawyers shall report any suspicious transactions to MLCU.

DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?

No, client / attorney privilege may not be relied on.

DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?

No, the local law does not provide any criminal and/or civil indemnity to lawyers who have reported suspicious transactions. However, according to the provision of Article No. 10 of the Anti-Money Laundering Law, criminal liability shall not be attributed to any person (including lawyers), who in good faith, fulfil the obligation of reporting suspicious transactions, or provide information or data which would otherwise be seen as violation of the rules relevant to ensuring confidentiality.

Furthermore, civil liability will not arise if such suspicion is believed to be based on reasonable grounds.

ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?

The competent authority shall decide on the permissibility of a lawyer rendering legal advice in this regard on a case by case basis.

IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.

Yes, according to the provisions of Anti-money Laundering Law, it is prohibited to disclose to a client, beneficiary or any person other than the MLCU and other AML enforcement entities, any information regarding reporting, investigating or examination procedures taking place in connection with suspicious transactions.

DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.

There are no restrictions on accepting a new client. However, even though there is no supervisory authority over accepting a new client, the usual provisions regarding legal and ethical practice must still be respected.

ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.

There are no ongoing monitoring requirements for existing clients required by law, but we believe as a reputable firm that it is necessary to monitor new clients to meet the standards set in our firm’s policy and as expected by our clients.

Kindly note that this differs from one firm to another based on how they practice their profession and implement their policies.

DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.

Not applicable.

HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?

There have been certain cases where lawyers have been arrested or convicted for corrupt or money laundering practices. 

HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?

Egypt is not a member of the FATF and, therefore, no mutual evaluation has been conducted for this country. However, Egypt is a founding member of MENAFATF (a FATF associate body for the Middle East and North Africa) and follows the Organisation’s recommendations of AML/ CFT measures, although no report has been released yet by MENAFATF regarding Egypt’s compliance with the FATF 40+9 recommendations.

In recognition of Egypt’s continued efforts to implement an effective AML/ CFT framework, Egypt was removed from the FATF blacklist of non-cooperating countries in 2004.  

Information provided by:

Rasheed Kamel

Attorney at law
Al Kamel Law Building
17 Nabil El Wakad Street
Dokki, Giza
Egypt
r.kamel@kamelaw.com
kmlaw@kamelaw.com  


Walid El Daly

Attorney at law
Al Kamel Law Building
17 Nabil El Wakad Street
Dokki, Giza
Egypt
w.i.daly@kamelaw.com
kmlaw@kamelaw.com