Identity Verification, KYC and AML Compliance in Egypt
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Key takeaways
Egypt has significantly improved its AML/KYC regulatory framework according to FATF, implementing three key laws that reflect its commitment to international financial transparency standards.
Egyptian document verification presents unique challenges such as the use of Arabic language, Hindu numerals, and specific security features that require specialized technology.
The main identification documents in Egypt are the National ID Card, Passport, and Driver's License, each with different levels of international standardization and security elements.
Didit offers the only free and unlimited KYC plan specifically adapted to the Egyptian market, with document verification in Arabic, advanced facial recognition, and continuous AML monitoring.
Egypt has established itself as a key emerging market in the Middle East and North Africa (MENA) financial landscape, where identity verification (KYC) and anti-money laundering (AML) processes have become essential to ensure the integrity of local and international financial systems.
According to the third Enhanced Follow-up Report from the Financial Action Task Force (FATF), dated May 2024, Egypt has made significant progress in its AML/KYC regulatory framework, achieving "Compliant" ratings in 11 of the 40 recommendations promoted by the organization, "Largely Compliant" in another 25, and "Partially Compliant" in only 4. This is the result of the country's multiple efforts to strengthen its financial system and adapt to international standards, moving away from being listed among countries on the FATF's gray or black lists—those showing serious deficiencies in their AML policies.
With over 117 million inhabitants, the country faces significant challenges in identity verification and regulatory compliance. Financial institutions in the country, as well as other obligated entities, must navigate a complex regulatory landscape while providing accessible and secure economic services. In this context, Egyptian document verification, KYC compliance, and AML regulations have become fundamental pillars for businesses, fintechs, and other companies seeking to operate in the Egyptian market, safeguarding the integrity of both national and international financial systems.
The Legal Framework of KYC and AML in Egypt: Regulatory Requirements
Egypt's regulatory framework for preventing money laundering and verifying customer identity has evolved significantly over the past two decades, reflecting the country's commitment to international standards in financial transparency and security.
Egyptian KYC and AML regulations are supervised by the Central Bank of Egypt (CBE) and the Money Laundering Combat Unit (MLCU), which work hand in hand with other government agencies to ensure compliance with regulations. It's no coincidence that Egypt is an active member of the Middle East and North Africa Financial Action Task Force (MENAFATF), which formalizes its commitment to fighting financial crimes at the regional level.
Law No. 80 of 2002: Anti-Money Laundering Law
Law No. 80 of 2002 is the cornerstone upon which Egypt's AML system is built. This legislation, enacted in response to growing concerns about money laundering, established for the first time a comprehensive legal framework to combat these crimes in the country. This regulation defines several key concepts such as "funds," "money laundering," "financial institutions," and "proceeds," laying the terminological foundation for the effective application of regulations.
This law specifically mentions crimes such as money laundering from drug trafficking, kidnapping, terrorism, or weapons trafficking, among other financial crimes, in addition to imposing significant obligations on financial institutions, such as proper due diligence when opening accounts (avoiding anonymous accounts or false names), the obligation to report suspicious transactions, and the implementation of due diligence procedures.
Law No. 8 of 2015: Terrorist Entities Law
Law No. 8 of 2015 complements Law No. 80 of 2002, expanding Egypt's legal framework regarding terrorist financing. This legislation establishes detailed mechanisms for designating "terrorist entities" and individuals as "terrorists," along with the legal consequences of such designations.
It also defines new concepts related to the context of terrorism, such as "money," "financing," or "freezing of funds." Article 3 of this law specifically applies preventive measures to interrupt the flow of resources to terrorist activities and represents a fundamental component of Egypt's AML/CFT regime.
Personal Data Protection Law No. 151 of 2020
Egypt enacted the Personal Data Protection Law in recognition of the growing importance of protecting this information in the digital age. This legislation establishes a comprehensive framework for protecting the personal information of Egyptian citizens and residents, including of course data collected during KYC and identity verification processes.
Among the measures that organizations must apply are data encryption, limitation of access to personal information, and the secure deletion of such data when it is no longer needed.
Identity Verification in Egypt: A Challenge for Businesses
Identity verification in Egypt represents a multifaceted challenge for businesses looking to operate in this dynamic market. Despite undeniable advances in financial infrastructure, organizations must face unique obstacles that require specialized solutions adapted to the local context.
The first challenge arises from the socioeconomic diversity of the Egyptian population. With more than 117 million inhabitants, with highly developed urban areas and rural areas with limited access to interconnected services, organizations must implement strategies adapted to different contexts.
Another challenge is the interaction between traditional systems and emerging digital verification methods. Although the Central Bank of Egypt has promoted financial inclusion, most KYC processes still depend on in-person verification by bank personnel or authorized service providers.
The Challenges in Egyptian Document Verification
Document verification in Egypt presents significant challenges for KYC service providers and, of course, financial institutions. We're talking about linguistic, technological, cultural, and design challenges that complicate identity verification in the country.
One of the main obstacles is the language barrier. Egyptian identity documents are written in Arabic, with the passport being the only document that includes fields in English, as well as the latest issue of the driver's license. The national identity cards, the most widespread and used document, have no text in the Western alphabet. This requires document validation systems to have Arabic language processing capabilities and transliteration according to ICAO standards to convert Arabic names to Latin characters. However, there may be discrepancies in how names are recorded and verified.
Number systems also vary compared to the West. In Egypt, Hindu-Arabic numerals are used to record birth dates, validity dates, and personal numbers. These data have little visual resemblance to Western numbering systems.
Egyptian documents are also not the most secure in the world, despite having various technologies. The passport largely complies with ICAO standards, although its design and structure can complicate analysis. The identity card has five heat-sealed polycarbonate layers, with laser-engraved data and a 2D barcode on the back. However, it does not use the ICAO standard for this type of document.
Key Documents in Egypt
- National identity card, officially known as the "Identity Verification Card," is the main identification document in Egypt. It is mandatory for those over 15 years of age. It contains essential personal information, such as name, date of birth, gender, religion, or husband's name (for married women), as well as a unique 14-digit national number.
- Egyptian passport, issued by the General Department of Passports, Immigration, and Nationality, did not change in design until 2008. It includes a barcode and personal data in both English and Arabic, being the only one that includes this bilingual feature. It still does not have an NFC chip, despite meeting most ICAO standards.
Egyptian passports issued in 2008.
Additionally, we find three different types of passports: Ordinary, Service Passport, and Diplomatic.
- Egyptian driver's license, issued by the General Traffic Directorate, was updated in early 2024 with a new electronic license. The new versions are including the holder's name and most of their details duplicated in Arabic and Latin characters, to facilitate verification with automated mechanisms.
Didit: Transforming Identity Verification and KYC and AML Regulatory Compliance in Egypt
Didit is revolutionizing identity verification and regulatory compliance processes in Egypt by offering the market's first and only free and unlimited KYC plan, fully adapted to local complexities. Thanks to our unique approach, we have managed to reduce entry barriers for companies that need to implement identity verification systems in the challenging Egyptian environment.
Our value proposition is based on:
- Document verification: We validate documentation from more than 220 countries and territories. Our system is adapted to handle the particularities of Egyptian documents, including Arabic text processing and Hindu numerals.
- Facial recognition with liveness detection: Our biometric system is powered by various liveness detection methods, both active and passive, to ensure that the person is really who they claim to be and is present at the time of verification.
- AML Screening and Continuous Monitoring (optional): We perform real-time checks against more than 250 global data sets, covering more than a million identities on watchlists or sanctions and PEPs. This helps companies explicitly comply with the regulations established in Law No. 80 of 2002, Law No. 8 of 2015, and the guidelines of the Central Bank of Egypt and the Money Laundering Combat Unit.
What official documentation does Didit verify in Egypt?
- National identity card
- Egyptian passport
- Driver's license
Didit, your KYC/AML ally in Egypt
Didit positions itself as a fundamental ally for all companies that wish to operate in Egypt, thanks to its robust identity verification system. More than 800 companies from different sectors have already integrated our technology.
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