Summary

This proclamation establishes a comprehensive legal framework to prevent and combat money laundering and terrorism financing in Ethiopia by imposing strict obligations on financial and non-financial institutions, enhancing transparency through customer identification and beneficial ownership disclosure, mandating reporting of suspicious and large transactions, regulating cross-border cash movement, and empowering authorities to investigate, seize assets, and enforce penalties.

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🔹 1. Purpose of the Law

• Prevent and control money laundering and terrorism financing.
• Protect the financial system and national security.
• Align Ethiopia with international anti-money laundering (AML) standards.

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🔹 2. Key Institutions

• Establishes/empowers the Financial Intelligence Center (FIC).
• Involves:
  • Police
  • Public Prosecutor
  • National Intelligence & Security Service
  • Ethiopian Revenue and Customs Authority
  • Regulatory bodies

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🔹 3. Scope of Application

Applies to:

• Financial institutions (banks, insurance, etc.)
• Non-financial businesses (lawyers, accountants, real estate, etc.)
• Individuals and legal entities

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🔹 4. Key words

Money Laundering, Financing of Terrorism, Proceeds of Crime, Predicate offence, Illicit funds, Asset forfeiture, Freezing of Assets, Financial Intelligence Center, Customer due diligence (CDD), Know your Customer (KYC), Suspicious transaction Reporting (STR), Currency transaction reports (CTR), Risk Assessment, International Cooperation, Cross-border transactions, Beneficial ownership, Shell Companies, Terrorist Organizations,

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🔹 5. Preventive Measures

✔️ Customer Due Diligence (CDD)

Institutions must:

• Identify and verify customers
• Understand the purpose of transactions
• Identify beneficial owners
• Monitor ongoing transactions

✔️ Risk Assessment

• Institutions must assess and document risks of money laundering and terrorism financing.

✔️ Record Keeping

• Maintain accurate and up-to-date records.

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🔹 6. Reporting Obligations

• Report:
  • Suspicious transactions
  • Large transactions above a set threshold
• Reports go to the Financial Intelligence Center (FIC)

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🔹 7. Cross-Border Controls

• Mandatory declaration of:
  • Cash
  • Bearer negotiable instruments
  • Precious metals/stones
• Authorities can seize assets if:
  • Not declared
  • Falsely declared
  • Suspected to be linked to crime

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🔹 8. Transparency Requirements

• Legal entities must:
  • Maintain information on beneficial ownership
  • Provide access to authorities when requested

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🔹 9. Restrictions on Banking Relationships

• Prohibits dealing with:
  • Shell banks
  • Banks without physical presence or proper supervision

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🔹 10. Investigation & Enforcement

Authorities can:

• Investigate suspicious activities
• Freeze and seize assets
• Share information across agencies

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🔹 11. Criminal Offenses & Penalties

• Money laundering and terrorism financing are criminal offenses.
• Penalties include:
  • Imprisonment (10-25 years)
  • Fines (up to 150,000 birr)
  • Confiscation of assets

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 12. Effective Date: February 4, 2013

13. Repeals: The Prevention and Suppression of Money Laundering and Financing of Terrorism Proclamation No. 657/2009; and b) Article 684 of the Criminal Code