The Central Bank of the UAE (CBUAE) has issued new guidelines to help licensed financial institutions (LFIs), which offer services to cash-intensive businesses (CIB), to combat money laundering and terrorism financing.
CIBs are businesses that experience a high volume of cash flows, spanning over various sectors like retail, wholesale and trading, travel, and transport, according to the central bank. Some aspects of CIB’s businesses, like the involvement of cash couriers, cash deposits, currency exchanges and cross-border movement of cash, may be vulnerable to money laundering or the financing of terrorism and illegal organizations.
The guidance came into effect on 28th September and it urges LFIs to comply with its requirements within one month from said date. It will assist the understanding and effective implementation by LFIs of their statutory anti-money laundering and combatting the financing of terrorism (AML/CFT) obligations.
HE Khaled Mohamed Balama Governor – CBUAE
“The new guidance affirms our commitment to implement high regulatory control over LFIs and their transactions with cash-intensive business activities and to complement with the UAE’s path to actively participate in international efforts to AML/CFT. We will continue our efforts to issue similar regulatory guidelines, to ensure enhancing the efficiency and robustness of our banking and financial system, in line with the Financial Action Task Force (FATF) standards.”
LFIs, that offer services to CIBs, must take a risk-based approach in their anti-money laundering (AML) initiatives and evaluate CIB customers to determine their degree of risk. They must perform appropriate customer due diligence that comprises customer and beneficial owners identification, understanding of the customer business, and ongoing monitoring of the business relationship.
Further, LFIs should obtain appropriate information regarding the source of cash deposited in a customer’s account as well as mandate the use of Emirates ID for cash deposits in automated teller machines (ATMs).
Additionally, LFIs should maintain transaction monitoring systems equipped to identify patterns of activity that appear unusual and potentially suspicious and must report any behavior that they reasonably suspect may be linked to money laundering, financing of terrorism or a criminal offense by submitting suspicious activity/transaction reports directly to the UAE’s Financial Intelligence Unit, using the “goAML” portal.
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