The Central Bank of the United Arab Emirates has issued new guidelines to help Licensed Financial Institutions (LFIs) – who provide loans to cash-intensive companies (CIB) such as retail, commerce, travel and transportation – fight money laundering and terrorist financing.
LFIs providing services to CIBs must take a risk-based approach to their anti-money laundering (AML) programs and assess CIB clients to determine their level of risk, the regulator said in a statement on Sunday.
CIBs are high volume cash flow companies that span a variety of industries such as retail, wholesale and trade, travel and transportation, according to the central bank.
“LFIs must perform reasonable customer due diligence, which includes identifying customers and beneficial owners, understanding customer business and ongoing monitoring of the business relationship,” the central bank said.
LFIs should also obtain appropriate information about the origin of cash deposited into a customer account and require the use of Emirates IDs for cash deposits at ATMs.
In addition, LFIs should maintain transaction monitoring systems to detect patterns of potentially suspicious activity that may be linked to money laundering, terrorist financing or a criminal offense, and submit transaction reports directly to the UAE’s Financial Intelligence Unit via the goAML portal.
The UAE has announced various measures to combat and prevent money laundering in recent months.
Dubai set up a specialized court in August to focus on combating money laundering and other financial crimes to strengthen the integrity of its financial system. The Dubai Misdemeanor Court earlier this year convicted eight people and three companies of approximately Dh14 million ($ 3.81 million) of cyber fraud and the laundering of stolen funds.
It also fined nearly Dh500,000 (US $ 136,000) a currency exchange office operating in the country for failing to adequately comply with anti-money laundering regulations in April.
“The new guidelines reaffirm our commitment to introduce a high level of regulatory control over LFIs and their transactions with cash-intensive business activities and to complement the UAE’s path to actively participate in the international AML / CFT efforts,” said Khaled Balama, Governor of the Central Bank of the United Arab Emirates.
“We will continue our efforts to enact similar regulatory guidelines to improve the efficiency and resilience of our banking and financial system in line with the standards of the Financial Action Task Force (FATF).”
The latest guidelines came into force on September 28, according to the banking regulator. LFIs were given one month to meet the requirements.
The UAE has also joined other countries to crack down on money laundering.
In August, the Financial Intelligence Unit teamed up with the China Anti-Money Laundering Monitoring and Analysis Center to share information and help fight global money laundering and terrorist financing.
Updated: October 3, 2021, 2:14 p.m.
