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Money laundering, part 2.


Money laundering law in Oman


The Sultanate of Oman,[1] is a member of the Gulf Cooperation Council (GCC), which is one of the member of Financial Action Task Force (FATF).[2] In addition to that Oman is also a member of Middle East and North Africa Financial International Task Force (MENAFATF), an affiliate of the FATF.[3] In Oman, the first law regarding money laundering was promulgated in 2002, namely, the Money Laundering Law (ML1), the Royal Decree No. 34/2002. The ML1 was accompanied by the Executive Regulations of the Anti-Money Laundering Law (ER), the Royal Decree 72/2004. Later, in 2010, the ML1 was replaced by the Anti Money Laundering and Combating Terrorist Financing Law (ML2), the Royal Decree No. 79/2010. As per law of Oman, the act of money laundering is considered as a crime and for that the authorities have taken numerous efforts to put that in conformity with the requirements of the United Nations Vienna Convention, Palermo Conventions, and FATF.[4]

The act of money laundering is defined in article 2,[5] as follows:

Any person shall be guilty of the crime of money laundering if he intentionally, carries out any of the following acts:

1) Exchange, transfer, or move funds; carry out any transactions by the proceeds of the crime while being consciously aware they are obtained directly or indirectly from a crime, or any other act that constitutes a participation in a crime in order to whitewash or conceal the nature and source of these proceeds, help any accomplice(s) in a crime, hinder the exposure of a person who has committed the crime from which the proceeds have been obtained, or help a person escape the legal penalty fixed for his acts.

2) Whitewash or conceal the nature, source, location, movement and ownership of the proceeds of the crime and the related or resulting rights while being consciously aware that they are obtained directly or indirectly from a crime, or any other act that constitutes a participation in a crime.

3) Acquiring, owning, receiving, managing, investing,  guaranteeing, or using the proceeds of the crime, holding or keeping the same while being consciously aware that they are obtained directly or indirectly from a crime, or any other act that constitutes a participation in a crime.

For the offence, the punishment prescribed in the law for the perpetrator of the crime is the imprisonment of years between 3 to 10. In addition to that the criminal has to pay the fine of 5000, five thousand riyal, or equivalent to the amount of money subjected to money laundering crime, if higher than the fine.[6] Moreover, a person also to be considered as commenced the crime of money laundering, if he is suspicious of, or have any information about the act of money laundering or terrorism financing; and he deliberately conceals that information or discloses the same intentionally in such a way that his disclosure will prejudice the function of any inquiry or intelligence against that act. For that he will be punished with the imprisonment of not less than 3 years and/or the fine of 3000, three thousand riyal; or either of them.[7]    

Exceptionally, both, the imprisonment as well as the fine go double, (1) if the crime is committed accompanied by person/persons; or (2) through an organized criminal gang; or (3) in combination with other criminal activities; or (4) the power or influence of person is used though his office, profession or society; or  (5) the offender is perpetrator or accomplice in the original crime from which the funds are obtained and subjected as money laundering.[8]

The report which evaluated the situation of the country on the issue of money laundering and terrorism financing. It has pointed out the areas which need to be addressed to make the function of combating the money laundering more effectively. For example, it was pointed out that, (1) the country should finalize the forthcoming executive regulation and address the areas untouched in the previous ER; (2) as compare to the number of investigations made for the illicit proceeds, in particular for the drug-related crimes, the conviction rate is extremely law; (3) although the law has adequately addressed the issue of confiscation, seizure of property laundered and proceeds from the negotiable instruments, by contrast, only few number of confiscations are made subject to punishment.[9]

It is observed that Oman has effective regime to tackle money laundering, which functions in accordance with the FATF recommendations. At the same time there are issues the country has struggled to induce the global community in their favour. For example, as concluded by the report, although the country has the fine articulated law to deal with the offence of money laundering. In comparison, the achievement level still remains insufficient. Importantly, the effectiveness can be achieved and more perpetrators can be subjected to justice by enhancing the implementation level. Simultaneously, it can be uphold that the location of the country and the low crime rate still remains attraction for global community for numerous business opportunities.[10]



[1] Also quoted as Oman or the country
[2] FATF is the intergovernmental organization which make the policies and international standard to deal with the acts of money laundering and terrorism financing. In this regard the FATF has made recommendations which need to be adhered. Specially, the 40 recommendations are made with respect to dealing with the money laundering. In addition to that the FATF has made 9 special recommendations to combat with the act of terrorist financing
[4] United Nations Convention Against Transnational Organized Crime And The Protocols Thereto, 2004 <http://www.unodc.org/documents/middleeastandnorthafrica/organised-crime/UNITED_NATIONS_CONVENTION_AGAINST_TRANSNATIONAL_ORGANIZED_CRIME_AND_THE_PROTOCOLS_THERETO.pdf> accessed 11 February 2015; Convention Against Illicit Traffic In Narcotic Drugs And Psychotropic Substances 1998 <http://www.unodc.org/pdf/convention_1988_en.pdf> accessed 11 February 2015; FATF (n1)
[5] The Anti Money Laundering and Combating Terrorist Financing Law, the Royal Decree No. 79/2010
[6] ibid art 27
[7] ibid art 28
[8] ibid art 30
[9] The report was concluded by the team of experts of both, FATF and MENAFATF <http://www.fatf-gafi.org/media/fatf/documents/reports/mer/MER%20Oman%20full.pdf> accessed 11 February 2015
[10] As per statistics of December 2014, Oman faces medium to low level of threat from the potential money laundering crime. KnowYourCountry is an ISO 9001 Certified on-line information of money laundering and sanction information on a country by country statistics <www.knowyourcountry.com/1ratingtable.html> accessed 2 February 2015

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