Ministerial Decision No. 113 / 2021,

In the light of global initiative to combat market abuse and promote the utmost safety of investors, Oman has not been in distinct. Initially, The Royal Decree Ref. 79/2010 sets the definitions of Money Laundering and Terrorism and guidelines to be complied by diverse state institutions. Since, further regulations have been promulgated in coincidence with frequent technological advancement leading the development of diverse methods of Money Laundering and Terrorism. Recently, the Ministry of Housing and Urban Planning imposed further regulations on Real-Estate Firms, Development Companies, Brokerages and Intermediaries through its decision No. 113/2021. This review highlights and summarizes the decision main provisions.

Timeline

In order to ensure a standard scheme of prevention, the Decision designates the period of 3 months as such All Anti-Money Laundering and Anti-Terrorisms Guidelines and Procedures set within the Ministerial Decision shall be implemented by the addressed entities. Nevertheless, all information and documents shared between the institutions and their clients shall be reserved within an internal system for a minimum period of 10 Years. This reservation period considers the fact that surveillance of Money Laundering and Terrorism instances could last for unpredictable number of year due to the complexity of criminal networks. Thus, law agencies and authorities would require updated and continuous information in relation.

Territorial Principle

In recognition of the Sovereignty Principle and Global initiative in combatting such Crimes, Company Branches and Subsidiaries shall not withdraw the country of operations rules while implementing MOHUP decision. However, due to the severity of Money Laundering and Terrorism on Human Interactions and Lifestyle, the decision emphasizes upon the implementation of the most stringent method in cases of conflict.

Internal Compliance

In addition to the timeline and territorial policies and guidelines incorporated within the decision, MOHUP aims at assisting the addressed entities Board in relation to the entities governance. Hence, it emphasizes on transparency and regularly updated versions of policies combatting Money Laundering and Terrorism Crimes.

In order to implement professional mechanisms of Detection and Management of Money Laundering and Terrorism, entities shall provide Regular Training Courses to Employees made of comprehensive syllabus in relation. Nevertheless, Adopt an Effective Audit System and Compliance mechanisms as well as Record Risk Evaluation Procedures.  In similar vein, a Compliance Manager shall be hired to oversee such operations in combatting the crimes

In terms of Data Verification, the entities are able to hire a Third-Party promoting Data Verification Services subject to several limitations. Significantly, this decision shall not be undermined by the assigned Third Party nor shall the regulations of its country of operation.

External Cooperation

All addressed entities shall not deal with individuals of unknown identity, using pseudonym or codes to enter such deals nor individuals included in the Black-List of United Nations Security Councils and any Lists of identical effect.

Obligations based on Legal Status

Real-Estate Firms, Development Companies, Brokerages, and Intermediaries shall follow recording procedures based on the Clients category as follows:

Client as a Natural Person: Reservation of identity verification documents containing all personal details of the client and the real beneficiary such as: Passport and Residential ID card and all numbers registered by their name. Nevertheless, reserve all official information in relation to the Client Legal Representative that enable identity verification of the Client and the real beneficiary and to clarify the framework of the deal.

Client lacking Legal Capacity: verify their eligibility and personality and the identity of their legal representative. Additionally, to review all related official documents and reserve a copy of the agency bond.

Client as a Legal/Juridical Person: A valid commercial register shall be obtained to ensure the legality of operation. Additionally, as part of the international initiative to combat crimes, records of local and international operations as well. Moreover, obtain a copy of the delegations issued by the Client and the legal categorization of its representative as well as to ensure that such documents are valid by adopting the verification measures under the decision and the Law and ensure the recognition of the documents are approved by the official authority to which its related. Nevertheless, to ensure transparency within the Corporate Governance System, all records of board members shall be confidentially granted.

Client as a Non-profit Organization: Compliance with Identity Verification Measures by cooperating with Ministry of Social Development and related authorities for data verification.

There are other legal terms and obligations that shall be considered in reflecting on the Ministry Decisions. As such is the “Beneficiary” phrase repeated thoroughly, it is the individuals whether a natural, lacking legal capacity, and/or a legal/juridical person being the advantaged from the deal between the Real-Estate Firms, Development Companies, Brokerages and Intermediaries and its clients. Furthermore, The Ministry Decision refers repeatedly to the Anti-Money Laundering and Anti-Terrorism law as promulgated by the R/D 30/2016 because it’s the basis on which initiatives have been adopted to combat Money Laundering and Terrorism Crimes in Oman. Nevertheless, the law defines the Clients, materials and conducts that constitute the crime as well as the authorities responsible in detection and prevention of the Crimes.  Thereon, the Directive shall be read in coincidence to the Law. Both the Law and The Ministry Decision Recognize international law and guidelines in combatting Crimes. Article 30 of the Decision obliges Real-Estate Firms, Development Companies, Brokerages and Intermediaries to implement all decisions rendered by Chapter 7 of the Charter of United Nations

Accountability

AML surveillance department at MOH shall hold the entities addressed within the decision accountable to its provisions based on Article 32 of the Decision. Any  default in compliance to the Ministry Decision and any related schedule is regulated under Article 33 of the Ministerial Decision and Article 52 of the Anti-Money Laundering and Anti-Terrorism law as promulgated by the R/D 30/2016.

Given the Above, We at K&Co advise Real-Estate Firms, Development Companies, Brokerages and Intermediaries to consider the Time line and Territorial Principles in implementing AML and Ant-Terrorism laws, policies and regulations as summarized above. Nevertheless, the Ministry Decision shall be read with regards to the Main AML and Anti-Terrorism Law as promulgated by R/D 30/2012. Yet, there are further future Ministry decisions and schedules to be reflected upon in coincidence to the MOHUP Decision 113/2021. This review is based on the material available up to its date.