UAE announces new guidelines to control money laundering

This central bank of united arab emirates New guidelines on money laundering and terrorism financing were released on Wednesday to counter global criticism of the country’s softness on the issue.

The guidance addresses the use of the digital identification system used by financial institutions in the UAE. Institutions should use identification as well as registration and authentication mechanisms in their digital identity systems, the bank said. They should also use authentication data such as IP addresses to detect suspicious behavior, including from “sanctioned and high-risk jurisdictions,” according to a press release.

The central bank added that financial institutions can use third parties for customer verification and identification, provided they comply with the 2018 UAE law on money laundering and terrorism financing.

The institutions should also use technology best practices and develop protections against cyberattacks and other breaches, the central bank said.

Why it matters: The UAE is included in the Paris-based Financial Action Task Force’sgray list“In early 2022, the level of money laundering was relatively high. Since then, the Gulf countries have been trying to clean up their practices in this regard. Abu Dhabi General Market released Reporting Guidelines in December. The Dubai Financial Services Authority and the UAE Tax Authority did the same last April.

Last July, the UAE’s central bank sanctioned private banks for failing to comply with reporting procedures, while the economy ministry fined companies in December for violating money laundering and terrorism financing laws.In August last year, the central bank also announced new procedures that financial institutions must follow to deal with high-risk individuals engaging in money launderingterrorism financing or other wrongdoing.

understand more: The central bank’s reference to “sanctioned jurisdictions” is also worth noting.UAE entities involved in several sanctions violation scandal In recent years it has been particularly associated with Russia and Iran. recent, us treasury department Sanctions on an Emirati company involved in oil deals with Iran.