Frequently Asked Questions


What is the mandate of the Financial Reporting Centre (FRC)?

The FRC is the national agency of Somalia responsible for facilitating the detection, prevention and deterrence of money laundering and terrorist activity financing. FRC analyzes and assesses information received from reporting entities and shares suspicious matters of money laundering or terrorist financing to competent authorities as permitted by the Act. FRC’s analysis is a vital tool to competent authorities and strikes a balance between privacy and enforcement needs.

What is money laundering?

Money laundering is the process whereby money produced through criminal activity (dirty money) is transformed into ‘clean money’ making the criminal origins difficult to trace. Criminals do this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention. The money earned from criminal activity can originate, but are not limited to, drug and/or human trafficking, all forms of corruption, counterfeit money and tax evasion. Money laundering tends to be performed in three stages.

  • “Placement” stage: Cash earned from criminal activities enters the system and is converted into monetary instruments, such as money orders or traveler’s checks, or deposited into accounts at financial institutions.
  • “Layering” stage: funds are moved into other accounts or other financial institutions to further separate the money from its criminal origins.
  • “Integration” stage: funds are reintroduced into the financial system and are used to purchase legitimate assets or to fund other criminal activities or legitimate businesses.

If you are a reporting entity and money laundering is suspected through the processing of a financial transaction, FRC needs to know.

What is terrorist financing?

Terrorist financing may involve funds raised from legitimate sources, such as personal donations and profits from businesses and charitable organizations, as well as from criminal sources, such as the drug trade, the smuggling of weapons and other goods, fraud, kidnapping and extortion.

Can I give you information on someone or entity that I think is involved in something illegal?

FRC can only receive information from the public about suspicions of money laundering or suspicions of terrorist activity financing. For more information about this, see the page called ” Contact Us”.

Can FRC impose administrative sanctions and penalties on reporting entities?

Yes. Contact FRC Compliance Team.


Can FRC conduct inspections or audits on reporting entities?

Yes. Contact FRC Compliance Team.



Can FRC freeze funds?

Yes. FRC acts as a central agency to freeze without delay funds as per applicable laws.

Does FRC confirm a reporting entity is non-compliant with the AML/CFT Act?

Yes. Contact FRC Compliance Team.

Does FRC charges any fees ?

At this stage FRC does not collect fees for services provided. Also, there are no charges to file a report with FRC. There is, however, an ongoing consideration of options for sustainable funding models.


Who represents Somalia in relation to money laundering and terrorist financing issues?

FRC is Somalia’s representative to all national, regional and global meetings that focus on money laundering and terrorist financing


Why have AML / CFT requirements by Somalia?

Somalia enacted the AML/CFT law to detect and deter money laundering and terrorist financing activities. Somalia’s laws and regulations are based on internationally recognized standards established by the Financial Action Task Force (FATF), the international standard-setting body which recommends to all countries to consider assess risk-based approaches to combat illicit activities.


Is Somalia a member of the Financial Action Task Force (FATF) or a regional affiliate?

Yes. Somalia joined in June 2018 the Middle East and North Africa Financial Action Task Force (MENAFATF) the regional branch of FATF based in Manama, Bahrain. Membership in MENAFATF requires high-level political commitment, adequately criminalising money laundering and terrorist financing, establishing adequate procedures for the confiscation of assets related to money laundering, establishing an adequate legal framework for identifying, tracing and freezing of terrorist assets and other UN sanctions, ensuring a fully operational and effectively functioning financial intelligence unit and strengthening preventive measures, including for wire transfers

What does FRC do with the reports and information it receives?

FRC analyses financial transaction reports in combination with other publicly available information, voluntary information provided by law enforcement, and other information to determine whether there are reasonable grounds to suspect that the information is relevant to the investigation or prosecution of a money laundering or terrorist financing offence.

Once the appropriate thresholds are met, FRC provides financial intelligence to partners including competent authorities to combat money laundering and terrorist financing.

As part of its mandate, FRC ensures the personal information it receives is protected from unauthorized disclosure.