Compliance Guidelines:

Regulatory Bodies in Yemen

Central Bank of Yemen (CBY): Historically, the CBY has played a crucial role in financial regulation within the country, which includes overseeing the banking system’s compliance with AML and combating the financing of terrorism (CFT) regulations.

Financial Information Unit (FIU): Yemen established an FIU to serve as the primary institution for receiving, analyzing, and disseminating suspicious transaction reports from financial institutions. The FIU operates in coordination with other domestic and international entities to combat money laundering and terrorist financing.

National Committee for AML/CFT: This committee is responsible for formulating and updating Yemen’s national AML/CFT strategies, monitoring their implementation, and ensuring Yemen’s commitment to international standards.

Law no. 1/2010 On Anti-Money Laundering and Counter- Terrorism Financing

Article 2 to 6 outline the definitions and general obligations related to money laundering and terrorist financing. This law provides the primary legal framework for AML/CFT activities in Yemen. It outlines the definitions, obligations, penalties, and measures for combating money laundering and the financing of terrorism.

Definition of Money Laundering: Chapter 2, Article (3)(a)

A person is guilty of money laundering if they, within or outside the Republic:

• Transfer funds knowing or having reason to believe they are from criminal activities to hide their origins or to assist someone involved in such crimes to evade consequences.
• Conceal the origin, source, location, disposition, movement, or ownership of funds knowing or having reason to believe they are from criminal activities.
• Acquire, possess, or use funds knowing or having reason to believe they are from criminal activities at the time of receipt.
• Knowledge of funds being from criminal activities can be deduced from factual circumstances.

Complicity in Money Laundering: Article (3)(b)

• A person is also guilty of money laundering if they play any role, such as initiating, participating, instigating, ordering, colluding, conspiring, advising, or assisting in the acts listed in Article (3)(a).

Predicate Crimes for Money Laundering: Article (3)(c)

Money laundering is constituted when funds originate from specific predicate crimes including, but not limited to:

• Organized crime involvement.
• Terrorism and its financing.
• Smuggling activities, including antiques.
• Tax offenses.
• Trading stolen goods and other illegal commodities
• Fraud
• Environmental crimes.

Independence of Money Laundering from Predicate Crimes: Article (3)(e)

• Money laundering is treated as an offense separate from the predicate crime producing the illicit funds. A conviction for the predicate crime isn’t necessary to prove the illegal nature of the proceeds.

Definition of Terrorism Financing: Article (4)(a)

A person commits the offense of terrorism financing if they intentionally:

• Raise, provide, collect, or move funds, regardless of the legitimacy of the source.
• Knowingly direct funds towards a terrorist entity, individual, or act. This knowledge can be deduced from factual situations.
• Criminal liability remains even if the funds are partially used, unused, or whether the act occurred within or outside the Republic.

Complicity in Terrorism Financing: Article (4)(b)

• A person is also guilty of terrorism financing if they initiate, participate, incite, order, collude, conspire, advise, or assist in any of the acts outlined in Article (4)(a).

Organizing Terrorism Financing Activities: Article (4)(c)

• A person who organizes the commission of the offenses mentioned in Article (4)(a) or Clause (d) is also liable.

Involvement in Groups for Terrorism Financing: Article (4)(d)

A person who intentionally engages in a group aiming to commit one or more crimes related to the offenses specified in Article (4)(a) is guilty if the involvement aims to:

• Broaden the group’s criminal activity or purpose when it involves an offense mentioned in Article (4)(a).
• Directly commit an offense described in Article (4)(a).

Reference:

1. Financial Information Collection Unit