In its continued effort to uphold financial integrity, the UAE Central Bank has slapped a fine of about Dh3.5 million ($953,029) on an exchange house for breaching anti-money laundering and counter-terrorism financing regulations (AML/CFT) to abide by the country’s law.
As per the statement by the Central Bank on Monday, the penalty follows an in-depth examination that uncovered multiple offences by the unnamed exchange house.
This action is part of the regulator’s broader crackdown on financial institutions failing to meet compliance standards, especially in the areas of AML and CFT.
A fine of Dh100 million was levied on the exchange house just last week, it imposed a fine for “significant failures” in areas related to AML/CFT and other regulations.
The unnamed exchange house was also levied a fine of Dh200 million last month for multiple offences. The branch manager of the exchange house was permanently prohibited from working in any licensed financial institutions in the United Arab Emirates. Along with the ban a fine of Dh500,000 was also slapped.
Last week, a combined fine of Dh18.1 million was also imposed on the Central Bank’s two foreign bank branches operating in the UAE. This was for violations of anti-money laundering regulations.”
The central bank said, “The UAE Central Bank, through its supervisory and regulatory mandates, endeavours to ensure that all exchange houses, their owners, and staff abide by the UAE laws, regulations and standards … to maintain transparency and integrity of the financial transactions and safeguard the UAE financial system”.
The UAE has taken various actions to see that the financial sector is secured. UAE has incorporated strict laws specifically to fight money laundering and terrorist financing.
In 2023, AML/CFT guidelines for licensed financial institutions were introduced by the Central Bank. This included banks, finance firms, exchange houses, insurers, agents, and brokers.
A key focus of the guidelines is the adoption of digital identification systems by the licensed financial institutions to help with any customer due diligence processes.
In a continued effort to fight illicit financial activity, the UAE had worked out a strategy, unveiling the 2024–2027 National Strategy for Anti-Money Laundering, Countering the Financing of Terrorism, and Proliferation Financing last year.
The strategy outlines 11 key objectives focused on the “legislative and regulatory reforms the UAE is taking to prevent the impact of illegal activities on society”. The strategy is developed by the General Secretariat of the National Committee, it leverages World Bank Group’s methodology to align with international standards.
the focus of the UAE government is to tighten the legal framework by making relevant changes to the laws targeting money laundering, terrorist financing, and organised crime. the government is also working on creating a national committee specifically for this, in August. UAE has initiated the Executive Office of Anti-Money Laundering and Counter-Terrorism Financing, in 2021. This was established to fight money launderers, groups and individuals suspected of financing terrorism and organised crime networks.
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