The war in Yemen has significantly weakened a national programme to combat money laundering and terror financing by making it more difficult for state agencies to monitor commercial activity and the movement of funds.
In an exclusive interview with Al-Mashareq at his Sanaa office, National Committee on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) chairman Ahmed Jaber al-Sanabani said extremist groups seek to exploit the current circumstances to launder funds and finance their activities.
Parts of southern and eastern Yemen, where groups such as al-Qaeda and the "Islamic State of Iraq and the Levant" (ISIL) are active, are particularly at risk for this type of activity, he said.
The ongoing war also has hampered Yemen's ability to honour the commitments it made to the inter-governmental Financial Action Task Force (FATF) in order to be removed from its blacklist, he said, as it has yet to fulfill certain obligations.
Despite these challenges, the AML/CFT committee intends to continue to carry out its functions, he said, noting that Yemen has made a high-level political commitment to work with the Middle East and North Africa Financial Action Task Force (MENAFATF) to address strategic AML/CFT deficiencies.
Al-Mashareq : How has the war affected the committee's AML/CFT activities?
Ahmed Jaber Al-Sanabani : The war climate has had a significant adverse impact on the committee’s activities and AML/CFT programme, as state organs and institutions have been severely weakened, particularly the 19 regulatory and oversight agencies that operate within the programme’s framework, including commercial banks.
The committee is experiencing an acute financial shortage due to the war circumstances, and consequently, the prevailing climate has become conducive for the perpetration of money laundering and terror-financing crimes, especially in southern and eastern Yemen, where terrorist groups are active.
The war also has hampered Yemen's commitments to the FATF. Yemen remains on the FATF blacklist as it has yet to fulfill certain obligations, including improving its fiscal policy and putting FATF prescribed AML/CFT standards in place.
The war has prevented the FATF review team from visiting Yemen to ensure the [prescribed] procedures are being followed, and it also has prevented the committee’s delegation from traveling outside the country for the same purpose.
Moreover, the committee has no independent financial status and its budget is funded by the Ministry of Finance. A severe shortfall in revenue has hampered the activities of the state as a whole, and the committee is part of that.
Al-Mashareq : What are the consequences of Yemen’s expulsion from the FATF?
Al-Sanabani : Yemen cannot undertake AML/CFT efforts alone, because the world is interconnected and has become one small global village.
Furthermore, the AML/CFT law addresses combating this type of crime both inside and outside Yemen, and there are grave economic consequences to international banks suspending their operations in Yemen in the event it fails to honour its commitments in this regard.
Al-Mashareq : What actions will the committee take to revitalise itself under the current extraordinary circumstances in Yemen?
Al-Sanabani : The committee held a meeting in early August and approved the formation of working groups to prepare reports and respond to inquiries in order to activate the communication channels with peer regional and international organisations and committees.
Foremost among these is MENAFATF, of which Yemen is a member, to ensure we benefit from the experiences of other [member countries] and highlight Yemen’s role in the AML/CFT arena.
At the local level, the commission will hold three workshops, for mosque preachers, media professionals and civil society organisations, to raise awareness about AML/CFT crimes and drying up the sources of terrorism, as there are crimes being committed in this sphere.
These include both deliberate and inadvertent [crimes], including smuggling, which is categorised as an AML crime and is being carried out by some parties who are not aware that it falls into this category of crimes.
By organising these workshops -- especially those for mosque preachers, who are targeted because they are in close contact with the public -- we aim to raise awareness, actively combat this phenomenon and minimise the dangers stemming from it.
Al-Mashareq : What are the negative consequences of money laundering and terrorism financing operations?
Al-Sanabani : Decline in liquidity in both domestic and foreign currency, because money laundering entails transfers outside the country via the banks, and contributes to higher inflation and unemployment rates.
It also weakens the national income, induces flight of funds outside the country, causes monetary and financial instability, saddles the government with additional expenses due to the outbreak of crime and lawlessness, and strengthens criminal centres because they control capital.