UAE Central Bank issued fresh guidance on anti-money laundering and combatting the financing of terrorism (AML/CFT) to Registered Hawala Providers in the UAE and Licensed Financial Institutions that provide services to RHPs.
The new set of directions will help in effective execution of the statutory AML/CFT obligations for RHPs and LFIs, the central bank said. The guidance, which also takes Financial Action Task Force standards into account, came into effect on Wednesday.
“The CBUAE will continue to keep a suitably close eye on licensed financial institutions in the country, including registered hawala providers to enhance their effectiveness in implementing AML/CFT measures to safeguard the UAE’s financial system,” Khaled Balama, governor of the CBUAE, said.
The UAE has integrated firm measures to combat money laundering and set up a dedicated agency this year to identify people responsible and those suspected of financing terrorists and organized crime. The CBUAE also regularly issues guidelines on how financial institutions can evaluate money-laundering risks.
Hawala providers extend an informal funds-transfer service between people using non-bank settlement methods.
The regulator permits legitimate hawala activity, and considers it an important element in its continuous efforts to boost financial inclusion and bring the unbanked segment of the population into the regulated financial system.
Hawala is regulated by the Registered Hawala Providers Regulation issued in 2019. All providers undertaking hawala activity in the UAE must hold a hawala provider certificate issued by the central bank.
“RHP are required to comply fully with UAE requirements relating to targeted financial sanctions and suspicious transaction reporting,” the CBUAE said.
“[They] are also required to establish and maintain an effective AML/CFT compliance programme designed to prevent misuse of this activity … this should include a competent compliance officer, appropriate customer and agent due diligence, transaction monitoring and record keeping.”
RHPs are mandated to maintain an account with a bank operating in the UAE to be used for settlements.
The Central Bank of the UAE last month issued new guidelines governing the implementation of sanctions related to AML/CFT.