CBUAE issues new guidance to combat money laundering & terrorist financing 

By Arya M Nair, Official Reporter
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The Central Bank of the United Arab Emirates (CBUAE) has issued new instructions for its licensed financial institutions (LFIs) on transaction monitoring and sanctions screening, with the aim of promoting anti-money laundering.

The guidance which comes into effect on September 13th calls for LFIs to strictly follow compliance with CBUAE’s requirements within one month period. According to the central bank, the guideline serves as a vital point of reference for LFIs to ensure compliance with anti-money laundering and combatting the financing of terrorism (AML/CFT) requirements.

LFIs must implement indicators to detect suspicious transactions and activities in order to file reports in the UAE’s Financial Intelligence Unit (FIU). In addition, before conducting any deal with any customer, whether individual or corporate, LFIs must screen their transactions against names on the UN Consolidated List, issued by the United Nations Security Council (UNSC) and its relevant Committees, or on the UAE Local Terrorist List by the UAE Cabinet.

They should establish and maintain comprehensive transaction monitoring and sanction screening programs, which include a well-calibrated risk-based framework, personnel training and awareness, and active board oversight.

LFIs should verify that their transaction monitoring and sanctions screening systems are continually improved based on the risks. The systems, as well as the monitoring and screening models used, should be subjected to independent testing, validation, and auditing, according to the bank.

In June this year, the bank has issued guidance on AML/CFT on LFIs which offer services to the real estate and other sectors. It was in line with the standards issued by the Financial Action Task Force (FATF). 

The UAE’s Financial Intelligence Unit (FIU) and China’s Anti-Money Laundering Monitoring and Analysis Centre teamed up in August to share information and to fight against global money laundering and terrorism financing.

Related: CBUAE issues guidelines for hawala providers & financial institutions