KHALEEJ TIMES, Thursday, Aug 19, 2021 | Muharram 10, 1443
New guidance to registered hawala providers and licenced financial institutions
Emirates:
The Central Bank of the UAE (CBUAE) has issued a new guidance on
anti-money laundering and combatting the financing of terrorism (AML/CFT) to
registered hawala providers (RHP) and licenced financial institutions (LFIs)
providing services to RHP.
The new guidance, which came into effect on August 18, 2021, will assist in the
understanding and effective implementation of the statutory AML/CFT obligations
for RHPs and LFIs, as outlined in Federal Decree-Law No. (20) of 2018 on AML/CFT
and Cabinet Decision No. (10) of 2019. This guidance also takes Financial Action
Task Force (FATF) standards and guidance into account.
The Central Bank of the UAE permits legitimate hawala activity, being considered
an important element in its continuous efforts to boost financial inclusion and
bring the unbanked segment of the population into the regulated financial
system.
Hawala is regulated by the Registered Hawala Providers Regulation issued by the
CBUAE in 2019. All providers undertaking hawala activity in the UAE must hold a
hawala provider certificate issued by the Central Bank.
RHP are required to comply fully with UAE requirements relating to targeted
financial sanctions and suspicious transaction reporting (STR). In addition, RHP
are also required to establish and maintain an effective AML/CFT compliance
program designed to prevent misuse of this activity to facilitate
money-laundering or terrorist financing. This should include a competent
compliance officer, appropriate customer and agent due diligence, transaction
monitoring and record keeping.
Furthermore, RHP must maintain an account with a bank operating
in the UAE to be used for settlement, and provide the CBUAE with its details.
CBUAE encourages LFIs to accept RHP customers and should manage any risk which
may result from these transactions through the use of appropriate controls. LFIs
must not accept customers who are unregistered hawala providers based in the
UAE, and must immediately report an STR to the UAE’s Financial Intelligence
Unit, inform the CBUAE when they are detected, and closely monitor the
relationship.
Khaled Mohamed Balama, Governor of the CBUAE, said: “The CBUAE will continue to
keep a suitably close eye on licensed financial institutions in the country,
including registered hawala providers to enhance their effectiveness in
implementing AML/CFT measures to safeguard the UAE’s financial system. This
guidance reminds all parties of their duties in this respect.”