Egypt and Jordan Take Divergent but Complementary Paths in MENAFATF’s 2025 Review Cycle

Egypt and Jordan have emerged as focal points in the MENAFATF’s 2025 assessment cycle, a process that signals a new phase in the Middle East and North Africa’s anti-money laundering and counter-terrorism financing landscape. With regional economies adapting to increased cross-border transactions and evolving risk profiles, compliance with the FATF’s 40 Recommendations has become the key benchmark of regulatory sophistication. The Enhanced Follow-Up Reports released in May 2025 for both countries reveal distinct strategies: Jordan pushing institutional reforms across multiple sectors, and Egypt refining the legal definition of money laundering within its constitutional framework.

The MENAFATF’s enhanced follow-up process is designed to move beyond formal compliance, testing whether reforms are integrated into domestic systems, guided by risk-based oversight, and aligned with international cooperation. Both Egypt and Jordan entered this cycle after years of scrutiny—Jordan under enhanced follow-up since 2019 and Egypt since its second evaluation in 2021. Their challenges were different in scope: Jordan’s weaknesses lay in non-financial sector supervision and transparency of legal structures, while Egypt’s problem centered on the precise criminalization of money laundering.

The 2025 findings highlight a wider regional shift. Rather than pursuing compliance only in reaction to external pressure, both states have begun to adopt more systemic approaches, weaving national strategies, data collection, and structured feedback into the regulatory framework. This reflects FATF’s own 2025 methodology, which emphasizes demonstrable effectiveness rather than narrow legal conformity.

Jordan’s fifth Enhanced Follow-Up Report, adopted in May 2025, represents the culmination of a years-long reform campaign following its 2019 evaluation. MENAFATF assessed progress on four critical recommendations—nonprofit organizations (R.8), transparency of legal arrangements (R.25), regulation of DNFBPs (R.28), and guidance and feedback (R.34). The outcomes showed significant progress across the board.

For Recommendation 8, Jordan confronted the issue of nonprofit sector vulnerability to terrorist financing. Authorities carried out a risk assessment in 2022, mapping which nonprofit organizations fell under FATF’s definition and identifying those most susceptible to abuse. Legal amendments followed, including changes to Companies Law No. 22 of 1997 and the introduction of new Social Development and Cybercrime laws that bolstered supervisory powers. Alongside these legislative measures, the country developed operational tools such as the Offsite and Onsite Supervision Guide for NPOs, a governance manual, and a practical booklet titled How to Protect Your Organization from Terrorist Financing Risks. A new cross-agency communication committee was also formed under the Ministry of Social Development to strengthen coordination between regulators, FIUs, and charitable entities. While MENAFATF observed that penalties were still not sufficiently deterrent and that international cooperation on nonprofit inquiries remained limited, these were categorized as minor shortcomings, resulting in an upgrade from “Non-Compliant” to “Largely Compliant.”

Recommendation 25, addressing transparency of Waqf (endowment) structures, was another central issue. The Ministry of Awqaf introduced “Waqf Transparency Instructions” requiring trustees to disclose beneficial ownership changes within thirty days and submit annual audited statements. AML Law No. 20 of 2021 reinforced obligations on due diligence and recordkeeping, while the Endowment Properties Directorate was given authority to maintain ownership records and collaborate with competent agencies. Though these reforms resolved most gaps, MENAFATF highlighted the absence of a legal mechanism for swift exchange of beneficial ownership data with foreign counterparts. The rating was nonetheless upgraded to “Largely Compliant.”

Progress was also clear under Recommendation 28 on DNFBP supervision. Article 14 of the 2021 AML/CFT Law formally designated supervisory authorities: the Department of Lands and Survey for real estate, the Ministry of Interior for jewelers, and professional associations for lawyers and accountants. Between 2021 and 2024, each authority issued sector-specific guidance, introduced on-site inspections, and applied sanctions. The main deficiency was the absence of explicit barriers preventing criminals or their associates from indirectly owning DNFBPs, but overall MENAFATF elevated the rating to “Largely Compliant.”

Perhaps most notable was Recommendation 34, where Jordan achieved its first “Compliant” rating. The FIU and Central Bank issued new guidance on financial fraud and laundering typologies, launched workshops, and provided reporting templates to improve suspicious transaction reports. By embedding these practices into manuals and circulars, Jordan established a sustainable system of engagement and feedback, meeting FATF’s standards of maturity.

By May 2025, Jordan’s compliance status stood at nine “Compliant,” twenty-seven “Largely Compliant,” and only four partially or noncompliant ratings. MENAFATF scheduled the closure of the enhanced follow-up process for January 2026, setting Jordan on track to enter its 2027 full evaluation as a regional benchmark.

Egypt, by contrast, focused narrowly on Recommendation 3 regarding the criminalization of money laundering. The country had entered its 2021 evaluation with most recommendations already rated compliant or largely compliant, but Recommendation 3 was marked “Partially Compliant” due to uncertainty over whether money laundering could be prosecuted independently of the predicate offense and the lack of explicit reference to organized criminal groups.

To address these issues, Egypt amended its AML/CFT Bylaws in 2023 through Cabinet Decision No. 3331. The changes introduced a legal definition of “organized criminal group” and added Article (2 bis), which confirmed that money laundering prosecutions could proceed even without a conviction for the underlying crime. These measures resolved MENAFATF’s earlier concerns at the technical level.

However, the reforms raised constitutional complications. Under Articles 95 and 170 of the Egyptian Constitution, only Parliament is empowered to legislate criminal law. MENAFATF noted that the reliance on Cabinet-issued bylaws to define criminal offenses conflicted with the principle of legality. The judiciary has attempted to fill this gap, with the Court of Cassation consistently ruling that money laundering is an independent crime. Article 14 of the AML Law imposes sentences of up to seven years in prison and fines of up to double the value of laundered assets, while legal persons face penalties of up to five million Egyptian pounds and confiscation of illicit proceeds. These judicial interpretations provided operational clarity despite the constitutional concern.

MENAFATF recognized Egypt’s progress by upgrading Recommendation 3 to “Largely Compliant,” raising the country’s overall profile to eleven “Compliant,” twenty-six “Largely Compliant,” and three “Partially Compliant” recommendations. Egypt remains in enhanced follow-up, with its next assessment scheduled for 2026. Still, MENAFATF emphasized that only explicit statutory codification of organized criminal group participation within the AML framework will resolve the constitutional limitation and deliver full compliance.

Taken together, the 2025 findings for Egypt and Jordan illustrate the two paths of AML reform in the region. Jordan is building institutional integration and broad governance capacity, while Egypt is refining legal precision and constitutional consistency. MENAFATF’s evolving methodology, which prioritizes effectiveness and sustainability, is shaping this dual trajectory.

For Jordan, the future challenge will be translating reforms into deeper cross-border cooperation and stricter enforcement in the nonprofit sector. For Egypt, the task is legislative consolidation—ensuring that core criminal definitions appear in primary law rather than through executive decrees. Regionally, the shared lesson is clear: compliance is no longer about ticking boxes, but about demonstrating measurable effectiveness. By linking legal structures, oversight, and cooperation, both Egypt and Jordan are signaling a new era of accountability-driven regulation across the Middle East and North Africa.

By fLEXI tEAM