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Financial institutions have one month to prove compliance with the new requirements
Licensed financial institutions (LFIs) in the UAE must comply with the Central Bank of the UAE (CBUAE) new guidelines on transaction monitoring and sanctions screening within one month to ensure that anti-money laundering measures are taken.
CBUAE said in a statement on Monday that the new regulations are intended to promote LFI’s understanding and effective implementation of its statutory anti-money laundering and combating the financing of terrorism (AML/CFT) obligations.
The guidelines came into effect on September 13 and require LFI to demonstrate compliance with CBUAE requirements within one month after that date.
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 a key reference point for licensed financial institutions to ensure their compliance with AML/CFT requirements.”
According to the guidelines, LFI is obliged to formulate internal policies, controls and procedures commensurate with the nature and scale of its business approved by its senior management to enable it to manage the identified risks of money laundering and terrorist financing.
In February, the UAE government established the Anti-Money Laundering and Anti-Terrorist Financing Executive Office. Last month, Dubai sets up a money laundering court.
“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,” the CBUAE statement said.
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.
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The CBUAE guidelines also stipulate that LFI should 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.
— Issacjohn@khaleejtimes.com
Isaac John
The editorial director of Khaleej Times is a well-connected Indian journalist and economic and financial commentator. He has worked in mainstream journalism in the UAE for 35 years, including 23 years in Khaleej Times. He is a graduate of English major and a graduate of economics major, and has won more than 20 awards. He is widely praised for his real and insightful analysis of global and regional business and economic trends, and is respected for his keen understanding of local business scenarios.
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