UAE Central Bank fines six exchange houses for compliance failure

The banking regulator imposed a total penalty of $4.71m against the businesses

The regulator recently issued new guidelines to help licensed financial institutions combat money laundering and the financing of terrorism. Photo: Ryan Carter / The National

The Central Bank of the UAE has fined six exchange houses operating in the country for failing to achieve the appropriate levels of compliance with anti-money laundering regulations.

The banking regulator imposed a total penalty of Dh17.31 million ($4.71m) against the six exchange houses in accordance with Article 14 of the Federal Decree Law No 20 of 2018 on anti-money laundering (AML), combatting the financing of terrorism (CFT) and the financing of illegal organisations.

“All exchange houses operating in the UAE have been allowed ample time by the CBUAE to remedy any shortcomings and were instructed in the middle of 2019 to ensure compliance by the end of that year, informing them that further shortcomings would result in penalties under the Federal Decree Law No 20 of 2018 and its executive regulation, “ the central bank said in a statement on Monday.

“The CBUAE will continue to work closely with all financial institutions in the UAE to achieve and maintain high levels of AML/CFT compliance and will continue to impose further administrative and/or financial sanctions, as per the law, in cases of non-compliance.”

The UAE, which has strict laws to deal with money laundering and the financing of terrorism, has issued several regulations and adopted numerous measures to fight financial crime.

In November last year, the Ministry of Economy set up a new anti-money laundering department to ensure all non-financial businesses and professionals comply with local laws.

In August, Dubai set up a special court that focuses on fighting money laundering and other financial crimes to strengthen the integrity of its financial system.

The Dubai Misdemeanour Court convicted eight people and three companies of cyber fraud and laundering stolen funds amounting to about Dh14m earlier this year.

It also fined an exchange house operating in the country almost Dh500,000 for failing to achieve the appropriate levels of compliance with anti-money laundering regulations in April.

On Sunday, the central bank issued new guidelines to help licensed financial institutions (LFIs) – which lend to cash intensive businesses (CIB) including retail, trading, travel and transport – combat money laundering and the financing of terrorism.

LFIs that provide services to CIBs must take a risk-based approach in their anti-money laundering programmes and assess CIB customers to determine their degree of risk, the regulator said.