EGYPT Law and Practice Contributed by: Mahmoud S. Bassiouny, Iman Nassar, Habiba Gamaleldin and Israa Mostafa, Matouk Bassiouny
ities with other banks or credit agencies. A bank may not extend lending nor guarantee the facili - ties of its chairman, board members, auditors or any of their spouses or second-degree relatives, including any companies in which these persons have a controlling stake, excluding those subject to a cash collateral and the like, or those granted to the managing director or regional manager of branches of foreign companies (as the case may be) within the scope of the privileges granted to their personnel and subject to the same condi - tions as well as disclosure requirements. 4.3 Remuneration Requirements The Governance Instructions provide that a committee of three non-executive board mem - bers must be established in each bank to set the rules and recommendations for the remu - neration scheme of senior executives and board members. The financial remuneration includes matters such as salaries, allowances, in-kind benefits, share schemes and any other bonuses or financial benefits. The committee has certain guidelines to follow, for example: • The auditing roles in the bank must be given adequate remuneration without compromis - ing their independence. • A comparative study with other institutions’ salary schemes must be conducted to attract and maintain talent. • A written policy on salary and bonus schemes must be in place and reviewed and updated regularly. The board of directors shall ratify the policy and disclose the aggregate amount of the 20 highest-paid individuals in the bank. • A performance-based approach must be applied in deciding the level of financial remu - neration and, specifically, long-term assess -
ment criteria must be adopted rather than relying on short-term goals.
5. AML/KYC 5.1 AML and CFT Requirements
The Anti-Money Laundering Law No 80 of 2002 (“the AML Law”) regulates the methods and obligations of different stakeholders to combat money laundering and the financing of terrorism. It imposes certain obligations on financial institu - tions to apply “know-your-customer” measures prior to establishing a relationship with clients or undertaking certain transactions. It should be noted that the executive regulation of the AML Law was recently amended by Prime Minister Decree No 3331 of 2023. Any bank must request the necessary documen - tation evidencing the ultimate beneficial owner - ship of any new corporate client. This must be supported by declarations and a list of share - holders or partners for each shareholder of the entity as established in each jurisdiction. This line of ownership must be traced by the bank up until the ultimate individuals vested with ben - eficial ownership, to scrutinise any relationship with terrorist organisations or money laundering activities. The bank must further request all other docu - ments supporting the due incorporation and legitimate activities of the shareholders of the client, such as the articles and memorandum of association, the certificate of registration, and the lists of directors and shareholders. This infor - mation must be reviewed and updated regularly by the bank throughout the term of the relation - ship with its clients.
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