Somalia’s 3 Key Financial Reforms 2025

Regulation Names: Financial Institutions Law, Insurance Companies Law, Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) Law 
Date Of Release: 12 March 2025
Region: Somalia
Agency: Somalia Government

Somalia Strengthens AML/CFT with Approval of 3 Key Legislative Financial Reforms

In a significant move to enhance its financial regulatory framework, the House of the People of the Federal Republic of Somalia has approved three crucial draft laws. These legislative reforms aim to strengthen the country’s banking, insurance, and anti-money laundering measures, reinforcing Somalia’s commitment to economic stability and financial transparency.

Key Legislation Passed:

1. The Financial Institutions Law:

This law is a critical reform designed to regulate banking and financial services, ensuring compliance with international standards. By introducing clear guidelines for financial institutions, the law aims to enhance the stability and efficiency of Somalia’s banking sector, fostering confidence among investors and stakeholders.

2. The Insurance Companies Law:

This legislation establishes a comprehensive regulatory framework for the insurance sector, promoting growth and consumer protection. With clear oversight mechanisms in place, the law aims to encourage investment in insurance services, ultimately contributing to the expansion of Somalia’s financial industry.

3. Amendments to the Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) Law:

The amendments focus on strengthening measures to combat financial crimes, enhancing transparency, and aligning Somalia’s legal framework with global efforts against illicit financial activities. These revisions ensure that the country meets international compliance standards, reducing risks associated with money laundering and terrorist financing.

Impact on Somalia’s Financial Landscape

The passage of these laws marks a crucial step in Somalia’s economic reform agenda. By implementing effective financial policies, the Federal Government aims to promote transparency, accountability, and sustainable development. These measures are expected to attract foreign investment, foster economic growth, and enhance Somalia’s reputation in the global financial sector.

With these reforms, Somalia reaffirms its commitment to building a resilient financial system, paving the way for long-term economic stability and prosperity.

Read the full law here.

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