EGYPT Law and Practice Contributed by: Ibrahim Shehata, Hesham Kamel, Mohamed Abed and Hamza Shehata, Shehata & Partners Law Firm
ing online banking, mobile payments and other digital financial services. There are no special provisions regarding the elements of fraud in the financial services and fintech, so fraud in these sectors is subject to the general provisions of the Egyptian Criminal Code. Elements of fraud under Egyptian law include (as per Article 336 of the Egyptian Criminal Code): • material element – this refers to the use of fraudulent methods, the seizure of the victim’s property and a causality between the perpe - trator’s actions and the victim’s loss; and • moral element – this refers to the criminal intent (ie, the deliberate intent to deceive the victim and misappropriate their property through the knowing and unlawful employ - ment of fraudulent methods). 12.2 Areas of Regulatory Focus Several established forms of fraud as defined by Egyptian law are relevant to the fintech industry, such as the following. • Fraudulent money transfer – this can be caused by fraud or negligence from the payment system operator. In such cases, transferred amounts will have to be recovered (Article 192 of the Banking Law). • Providing misleading information – this refers to concealing data in the records or other documents submitted to the CBE. This is punishable by imprisonment and/or a fine ranging from EGP500,000 to EGP1 million (Article 230 of the Banking Law). • Credit reporting or rating services fraud – the intentional manipulation of credit reporting or credit rating services for the purpose of securing credit is punishable by a fine ranging from EGP100,000 to EGP1 million (Article 230 of the Banking Law).
• Providing unlicensed fintech services – run - ning or offering non-banking financial services through a fintech platform without a prior licence from the FRA would expose such unlicensed operators to a minimum imprison - ment term of six months and/or fines ranging from EGP200,000 to EGP1 million (Article 18 of the Fintech Law). • Data confidentiality breach – disclosing a cli - ent’s personal information without their prior written consent and/or unauthorised access to accounts or systems are punishable by a fine ranging from EGP100,000 to EGP1 mil - lion (Article 5, paragraph 5 and Article 36 of the Data Protection Law). • Market manipulation – this refers to a type of securities fraud (ie, buying or selling securities with the intent to artificially inflate or depress prices) (Article 21 Bis of the Capital Market Law). • Cybercrimes targeting bank cards, service and electronic payment methods – these crimes are punishable by an imprisonment term of at least three months and/or a fine ranging between EGP30,000 and EGP50,000 (Article 23 of the Anti-Cybercrime Law No 175 of 2018). 12.3 Responsibility for Losses The responsibility of a fintech service provider for customer losses in Egypt is based primarily on the contractual relationship between the pro - vider and the customer. However, any contract that stipulates the provider is only to share in losses or profits is not permissible under Egyp - tian law. According to Article 505 of the Egyptian Civil Code, in the context of commercial companies, it is prohibited for any partner to agree to share only in losses or only in profits. Extending this principle to this situation, a similar obligation
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