Oman has recently intensified its efforts to combat money laundering and terrorist financing by mandating the employment of compliance officers in specific licensed sectors, particularly focusing on the precious metals and precious stones trade. This strategic move is a critical part of the Sultanate’s national framework to align with global anti-money laundering (AML) standards and ensure the integrity and transparency of its financial and commercial operations.
Mandatory Employment of Compliance Officers
The Ministry of Commerce, Industry and Investment Promotion (MOCIIP) in Oman has issued a mandatory directive requiring all licensed establishments in the precious metals and precious stones trade sector to employ a dedicated compliance officer. This role is crucial to ensure adherence to Oman’s Anti-Money Laundering and Counter-Terrorism Financing Law (AML/CFT Law). The compliance officer will act as the primary liaison between the establishment and regulatory authorities, oversee internal controls, monitor suspicious transactions, and ensure that businesses comply with all AML requirements as stipulated by national law and international standards.
The directive highlights that failure to comply with this requirement will attract legal consequences, emphasizing the government’s commitment to heightened surveillance and enforcement in sectors vulnerable to money laundering risks. Licensed businesses must promptly submit the details of their appointed compliance officers to the Ministry via the dedicated AML email: [email protected], and they may seek assistance or clarification through the Anti-Money Laundering Department helpline.
Enhanced Oversight and Risk-Based Approach
This initiative is part of a broader strategy to activate a risk-based oversight system in Oman, whereby institutions are supervised according to their specific risk levels related to money laundering and terrorism financing. By focusing enforcement resources on sectors and institutions with higher inherent risks, regulatory bodies aim to improve the effectiveness of AML controls across the market.
Abdul Hamid bin Mubarak al Shaidi, an anti-money laundering specialist with the Ministry, emphasized the importance of compliance officers being well-trained in recognizing suspicious activities and proficient in using the AML reporting platform. This training is vital to strengthen the country’s defenses against illicit financial flows and protect the integrity of the national economy.
Legal and Regulatory Framework
The foundation of Oman’s AML and CFT regime is Royal Decree No. 30/2016, which replaced the earlier law and expanded the AML responsibilities for financial institutions and designated non-financial businesses and professions (DNFBPs), including those in the precious metals and stones sector. The decree clearly defines money laundering and terrorism financing offenses, provides guidelines for customer due diligence, mandates suspicious transaction reporting, and enables asset confiscation and international cooperation.
The Central Bank of Oman (CBO) plays a key role by issuing binding guidelines on AML compliance for financial institutions, including the mandatory appointment of Money Laundering Reporting Officers (MLROs), conducting periodic risk assessments, and supervising AML implementation through on-site inspections. In parallel, the National Centre for Financial Information (NCFI) functions as Oman’s Financial Intelligence Unit (FIU), responsible for receiving and analyzing suspicious transaction reports and collaborating with international counterparts to disrupt financial crimes.
Institutional Coordination and National Strategy
Oman’s National Committee for Combating Money Laundering and Terrorism Financing spearheads the national strategy against these crimes. The committee formulates policies, fosters coordination among governmental agencies, studies international treaties, and recommends measures to enhance national AML/CFT effectiveness. The employment of compliance officers is seen as an integral pillar of this strategy, reinforcing the institutional framework needed for robust detection and prevention mechanisms.
Impact on the Precious Metals and Stones Sector
The precious metals and gemstones sector is considered high risk due to the nature of its transactions, which often involve large cash payments and cross-border trade. Appointing a compliance officer helps safeguard the sector by ensuring compliance with legal and regulatory standards, thereby reducing the risk of illicit funds entering or moving through the sector. This measure also encourages ethical business practices, protects legitimate investors, and sustains the reputation of Oman’s financial and commercial markets internationally.
Opportunities and Challenges
The new compliance requirement opens opportunities for businesses in Oman to demonstrate their commitment to integrity and transparency, potentially attracting more foreign investment due to improved regulatory adherence. Conversely, it imposes a higher compliance burden, especially for smaller establishments that may need to invest in training and systems to fulfill these obligations.
The government continues to raise awareness about the risks and consequences of money laundering, working in partnership with relevant authorities and stakeholders to promote a culture of compliance throughout the economy. This comprehensive approach underscores Oman’s resolve to safeguard its national economy from financial crimes and align fully with international AML/CFT standards.