The Central Bank of the UAE (CBUAE) has issued new guidance on anti-money laundering and combating the financing of terrorism (AML/CFT) for its licensed financial institutions (LFIs) on the implementation of Targeted Financial Sanctions (TFS).
The newly issued guidance is a supplement to the Executive Office of the Committee for Goods and Materials Subject to Import and Export Control’s guideline on TFS for financial institutions and specified non-financial businesses and professions, which was issued in May 2021. The Executive Office acts as a central authority to ensure the implementation of TFS in the UAE.
As per the statement, “The guidance, which came into effect on 8th July 2021, and requires LFIs to demonstrate compliance with its requirements within one month from said date, will assist the understanding and effective implementation by LFIs of their statutory AML/CFT obligations.”
LFIs should develop, execute, and frequently update an effective sanctions compliance program that includes a comprehensive risk assessment, screening procedure, and staff training, according to the new guidance.
“The threat of money laundering and terrorist financing on the UAE’s financial system is one that we aim to address through rigorous regulatory oversight and continuous clarification of LFIs’ obligations. This Guidance is one of many that we have and will continue to issue over the coming period as CBUAE looks to strengthen the understanding and implementation of its requirements amongst the financial community, in line with the Financial Action Task Force’s standards.”
LFIs must register on the Executive Office’s website to receive automated email notifications about the listing and de-listing of individuals or companies on the UN Consolidated List and the Local Terrorist List.
They are required to regularly screen their databases and transactions against the names that appear on the aforementioned lists and immediately be notified of any changes to these lists. When a match to a listing is found during the screening procedure, LFIs must freeze the money of the listed people or businesses without delay and without prior notice within 24 hours.
Any freezing measures and/or attempted transactions must be immediately reported to CBUAE and the Executive Office. LFIs should refer to CBUAE’s and the Executive Office’s websites for updates for the modality of these notifications, according to the statement.