Somalia’s President Hassan Sheikh Mohamud signed into law the Anti-Money Laundering and Combatting the Financing of Terrorism bill (AML/CFT) on February 21, 2016. This law will undoubtedly empower the Central Bank of Somalia to implement such like regulations that will ensure money sent from the diaspora community reaches family members and isn’t redirected to fund al Shabaab.
A joint effort by the Central Bank of Somalia and the Ministry of Finance has seen the much anticipated Anti-Money Laundering and Combatting the Financing of Terrorism bill (AML/CFT) bill signed into law by Somalia’s president.
The bill provides a legal framework from which the central bank will implement regulations and strengthen the financial sector that has been marred by major loopholes that have enabled the laundering of money to finance the al Shabaab.
Anti-Money Laundering and Combatting the Financing of Terrorism bill (AML/CFT) will address weaknesses like:
- Money laundering and terrorism financing activities and offences
- Customer verification
- Prohibited relationships and anonymous accounts
- Suspicious financial activities monitoring and reporting
- Politically Exposed Persons (PEPs)
- Record keeping and reporting obligations
- Establishment of AML/CFT committee
- Establishment of Financial Reporting Centre
- Civil and criminal penalties
- International cooperation
This bill will open Somalia’s financial sector into a more formal and monitor environment that will be more conducive for international transactions especially remittances from the diaspora community.
The law is expected to install more stringent measures to close all the loopholes the al Shabaab and the financiers have exploited to give money to run the terrorist organization. Somalia joins other African countries that have installed similar measures to monitor, track and supervise all financial activities.
The law is a big blow to the al Shabaab militants who have constantly explored the loopholes to channel funds and resources into their activities untracked and unrecognizable. By cutting their financial in-flow renders major blows to the smooth running of their operations creating weaknesses that can be explored by the AMISOM troops to breakdown their network and defeat them.