Over the past issues of the Client Alert, we have discussed certain provisions of Royal Decree No. 79/2010, Oman’s Anti Money Laundering and Combating Terrorist Financing Law (the “AML-CTFL”), which is designed to combat money-laundering and terrorist financing. In the April issue, we examined what constitutes the offence of money-laundering, how the authorities define ‘proceeds of crime’ and what actions could be deemed to be terrorist financing. In the May issue, we looked at the obligations under the AML-CTFL for all businesses that operate in Oman, financial and non-financial alike, to ensure their compliance with this law. This month, our final installment in this series provides an overview of the penalties which can apply if a business or person is found to have breached the AML-CTFL.
The penalties for breaching the AML-CTFL are severe, and businesses and individuals alike would be well advised to think carefully before engaging in any business which could fall within the scope of this law. Some of the main penalties are as follows.
Firstly, a person who commits or participates in a money laundering crime, or attempts to do so, may be punished (subject to the exceptions below) with imprisonment for a term ranging between three and ten years and with a fine of 5,000 Omani Rials or greater. Notably, there is no upper limit on the fine element of this penalty except that the fine may not exceed the value of the funds which were the subject of the money laundering crime.
We previously established that if a person has information regarding an act of money laundering or terrorist financing (or has reason to suspect that such an act has occurred) and fails to report this to the authorities or informs a person that they are the subject of an investigation under the AML-CTFL and that investigation is harmed by the disclosure, then such failure to disclose or tipping off would be offences under Omani law. Failure to disclose or tipping off are punishable by (subject to the exceptions below) a term of imprisonment of up to three years and a maximum fine of 3,000 Omani Rials.
The public should be aware that the AML-CTFL also states that the disclosure of any procedures, report, analysis or investigation regarding a transaction that involved money laundering or terrorist financing, to the customer, beneficiary or anyone other than the competent authorities, would also constitute an offence under the AML-CTFL. This offence would be punishable by (subject to the exceptions below) a term of imprisonment for at least one year and a fine of up to 10,000 Omani Rials.
The penalties stipulated above can be doubled in the following cases:
- if the crime has been committed in complicity with one or more persons;
- if the offender commits the crime through an organized criminal gang;
- if the crime has been committed as a part of, or in connection with, other criminal activities;
- if the offender has committed the crime in an abuse of his position, e.g., by taking advantage of the powers vested in his office; or
- if the offender is a perpetrator or accomplice in the original crime from which the money laundering funds were obtained.
Conversely, if a perpetrator reports a crime under the AML-CTFL to the authorities and tells the authorities of the parties involved before the authorities had knowledge of the facts, then the reporting perpetrator may be exempted from the penalties stipulated under the AML-CTFL. Even if the report takes place after the authorities were aware of the crime, if it leads to forfeiture of the proceeds of the crime or the arrest of the other perpetrators, then the court may suspend a punishment of imprisonment for the reporting perpetrator.
While some of the penalties above would encompass terrorist financing, there is a specific penalty under the AML-CTFL which relates exclusively to terrorist financing: any person who commits or attempts or participates in terrorist financing may be punished by a minimum term of 10 years imprisonment and a minimum fine of 10,000 Omani Rials. As with the similar money laundering penalty above, the fine element of this punishment has no upper limit other than that it shall not exceed the value of the funds which were the subject of the terrorist financing; this presumably means the money which funded the terrorist financing and not the resulting financial damage which was caused by that terrorism, although the law is not clear on this point.
Companies should note that in addition to terms of imprisonment and fines levied, the Omani authorities have the power to impose a number of other business-related sanctions for breaches of the AML-CTFL. These include the annulment of a company’s licence, prohibiting the trade of the company’s securities in the Omani financial markets and, ultimately the power to close the company down.