EGYPT Law and Practice Contributed by: Mahmoud S. Bassiouny, Iman Nassar, Habiba Gamaleldin and Israa Mostafa, Matouk Bassiouny
Banks’ obligations under the AML Law extend to monitoring transactions processed within the bank and reporting any suspicious activities on accounts. This might require the bank to request supporting documents from the client for depos - its, money transfers or trade transactions, to check that the funds are not passing through sanctioned countries or the hands of terrorists and sanctioned groups. The CBE has created an anti-money laundering and terrorist combating unit to receive any sus - picious reports from banks in this respect. Each financial institution must appoint an anti-money laundering officer to be responsible for process - ing any alarms raised by the operation staff and for reporting incidents to the combating unit of the CBE. As a part of the CBE’s initiative to align with inter - national standards in combating money launder - ing and terrorism financing, adopt best practic - es, and reinforce existing operational practices, the CBE issued a circular on 24 December 2023 regarding the supervisory regulations for banks on anti-money laundering and the financing of terrorism. This circular sets out the minimum standards banks should adhere to while carry - ing out banking activities. Furthermore, banks remain obligated to implement additional appro - priate measures based on the results of their approved risk assessments. 6. Depositor Protection 6.1 Deposit Guarantee Scheme (DGS) Chapter 14 of the New Banking Law provides that a fund affiliated to the CBE must be estab - lished to guarantee the deposits of bank clients. This fund – the Guarantee of Deposits Fund (GDF) – has an independent legal personality
and budget. The GDF articles of association shall provide, inter alia, the following: • the mechanism by which the fund will achieve its goals and regulate its relationship with banks; • the structure of its board of directors and work systems; • the share of participation of each bank in its capital, and the annual membership fees; • the limits and amounts of deposits that can be guaranteed by the fund; and • the sources for raising funds and investment opportunities. The CBE has the power to impose penalties on banks if they breach any of the articles of asso - ciation of the fund or the related implementing decisions. To the best of our knowledge, the pro - visions of Chapter 14 of the New Banking Law have not yet been implemented, and as a result the GDF has not yet been established. 7. Prudential Regime 7.1 Capital, Liquidity and Related Risk Control Requirements The CBE’s Adoption of the Basel III Guidelines The CBE adopts the guidelines of Basel III through its regulatory circulars and decisions addressed to banks. There is a dedicated sector within the structural organisation of the CBE that is entrusted with several aspects of the adop - tion of Basel requirements. The Basel Sector of the CBE regularly monitors the latest updates in the Basel requirements and seeks methods to implement them in the banking sector. It further updates the guidelines in Egypt and conducts training for employees in co-ordination with for - eign regulatory bodies and authorities.
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