The new law sets rules to detect, prevent, and punish money laundering and the financing of terrorism.
Somalia has enacted Law No. 1, the Anti-Money Laundering and Terrorist Financing Act. The law creates a comprehensive framework to combat financial crime and to bring Somalia's financial system in line with international standards.
The Act was enacted to close loopholes that allowed money laundering and terrorist financing and to protect the integrity of the country's recovering financial sector. Its purpose is to make financial transactions more transparent and to give authorities the tools to act against illicit funds.
Law No. 1, the Anti-Money Laundering and Terrorist Financing Act was enacted and entered into force on February 21, 2016.
A financial system can only attract trust if it is protected from criminal abuse. After decades of conflict, Somalia faced real risks of money laundering and terrorist financing, and this law was designed to address those risks directly.
Article 2 (Offences of Money Laundering) defines money laundering to include converting, concealing, or transferring assets that come from crime.
The law spreads responsibility across the financial sector. Article 4 (Institutions and Professions Subject to This Law) extends its duties to banks and to non-financial businesses such as lawyers, real estate agents, and dealers in precious metals.
Reporting and monitoring sit at the heart of the law.
The law also creates the tools needed to enforce it. Article 21 (Responsibilities and Functions) sets out the role of the Financial Reporting Centre in gathering and analysing information, and Article 34 (Conditions for Confiscation) allows assets linked to crime or terrorism to be confiscated following a conviction.
This law is important because it gives Somalia a modern framework to fight financial crime and to meet international expectations. Clear obligations on due diligence, reporting, and confiscation make the financial system harder to abuse and easier to trust.
“Protecting a financial system from money laundering and terrorist financing is essential to economic stability and international trust. This Act gives Somalia clear duties for due diligence, reporting, and enforcement that meet global standards.”
, Aweis Osman Ahmed, M.Sc. (Master of Science in Information Systems), LL.B. (Bachelor of Laws)
Managing Partner at Mogadishu Law Office
This release is provided for general information and does not constitute legal advice. Professional legal advice should be obtained before acting on any matter discussed here.