CBUAE issues new guidance on transaction monitoring and sanctions screening for licensed financial institutions

The Central Bank of the United Arab Emirates (CBUAE) has issued new guidelines on transaction monitoring and sanctions screening for its licensed financial institutions (LFI).

This guide aims to promote LFI’s understanding and effective implementation of its statutory anti-money laundering and anti-terrorism financing (AML/CFT) obligations.

The guidance came into effect on September 13 and requires LFI to demonstrate compliance with CBUAE requirements within one month from the stated date.

LFI is obliged to formulate internal policies, control measures and procedures commensurate with the nature and scale of its business and approved by its senior management to enable it to manage the identified risks of money laundering and terrorist financing. LFI must also develop indicators to identify suspicious transactions and activities in order to submit suspicious transaction and activity reports or other types of reports to the UAE Financial Intelligence Unit.

In addition, before any transaction or entry, LFI is obliged to regularly screen its database and transactions based on the names on the list published by the United Nations Security Council and its related committees (United Nations Consolidated List) or the UAE Cabinet (List of Local Terrorists in the UAE). Establish a business relationship with any customer, whether it is an individual or a company.

According to the guidelines, LFI shall establish and maintain an effective transaction monitoring and sanction screening program, including a well-calibrated risk-based framework, employee training and awareness, and active supervision by the board of directors. In addition, LFI should ensure that its transaction monitoring and sanction screening systems are continuously enhanced based on its risks. The system, including the related monitoring and screening models used, should be independently tested, verified and audited.

Khaled Mohamed Balama, President of CBUAE said: “As we continue to improve the effectiveness of AML/CFT measures to protect the UAE financial system, we hope that licensed financial institutions will also perform their duties. This guide is for licensed financial institutions to ensure their compliance. The key reference point required by AML/CFT.”

To view the guide, please click on the following link:
https://www.centralbank.ae/en/cbuae-amlcft.