The Central Bank of the UAE has issued a new guidance on anti-money laundering (AML) and combatting the financing of terrorism (CFT) for licensed financial institutions (LFIs) on risks related to payments.
The guidance comes into effect immediately, with LFIs being obliged to comply with the regulator within a month. The document focuses on the money laundering and the financing of terrorism risks relating to payments and provides a list of preventive measures that LFIs should apply in order to mitigate such risks.
The move comes after the UAE was added to the list of jurisdictions under increased monitoring (Grey List) by the Financial Action Task Force (FATF) early in March. Grey Listing is typically applied to countries with gaps in their AML/CFT regimes, but where commitments have been made for swift resolution of these gaps.
As new payment products and services might bring risks to the financial system because of the rapid movement of funds between payment participants and across borders [...] LFIs should take a risk-based approach to mitigate and manage money laundering and the financing of terrorism risks,
says the official announcement on the Emirates News Agency (WAM) website.
According to the guidance, LFIs are responsible for conducting due diligence on customers, monitoring all transactions processed or conducted through the LFIs and reporting suspicious transactions to the UAE’s Financial Intelligence Unit.
LFIs should also have sanctions compliance programme with operational systems appropriately screening transactions.
As for correspondent relationships, LFIs should not process any payments for a correspondent unless they are entirely confident that the correspondent conducts appropriate screening.
Khalid Mohammed Balama, Governor of the UAE Central Bank, said:
The new guidance ensures that all LFIs in the UAE understand their AML/CFT responsibilities and have compliance programmes to mitigate risks payment-related risks.