Yousef Al Bustanji (Abu Dhabi)
Financial experts in the country confirmed that the financial system, the remittance system, the transfer and sending of money in the UAE financial sector, trading in precious metals in general, and the work of free markets are all subject to high transparency and a highly controlled system with regard to instant reports sent to the Central Bank and the responsible authorities, to detect Any suspicious operations, noting that the Central Bank has increased its penalties imposed on violating companies, banks and entities.
The experts explained that the regulations and legislation that were adopted by the responsible authorities in the country, and the workshops, training, courses and rehabilitation of cadres working in this sector were proactive at the level of the countries of the world and the region, within the framework of strengthening the foundations adopted by the state to serve its orientations and its quest to be a clean and transparent global financial center. They said that the comprehensive security system in the country does not allow the passage of funds that are suspicious of origin.
Officials in the banking sector explained that the tightening of regulations, standards and measures taken by the Central Bank, during the past years, and the obligation of companies and cadres working for them to strict standards, led to the exit of more than 45 banking companies from the market during the past four years approximately.
The officials pointed out that the Central Bank obligated the exchange companies operating in the country to implement a risk-based approach, by conducting a regular assessment that covers all risks related to the exchange business, including customers, products, services, delivery channels, new technologies, geographical risks, counterparties and illegal financing.
At the same time, the results of the risk assessment of the authorized exchange firms should be in the interest of the overall policies of the program, procedures, internal controls and staff training, for effective risk reduction.
They explained that the Anti-Money Laundering and Combating the Financing of Terrorism program includes establishing a dedicated compliance department, conducting customer due diligence, continuously examining transactions, and fully complying with the UAE’s requirements regarding targeted financial sanctions and reporting suspicious transactions.
They explained that the fines imposed by the Central Bank on banks and companies that violated the regulations exceed hundreds of millions of dirhams.
In November 2021, the Central Bank of the Emirates issued more guidelines for the financial sector, especially banking companies, which contribute to clarifying risks and obliging exchange companies operating in the country to strictly and effectively implement their legal obligations related to countering money laundering and combating terrorist financing.
The Central Bank indicated that the procedures that began to be implemented last November also take into account the standards and directives issued by the Financial Action Task Force (FATF), and obligate exchange companies to prove their compliance with the new requirements within one month of their issuance.
The Central Bank obligated the concerned companies to rely on an effective program to combat money laundering and combat the financing of terrorism, provided that the program is designed to prevent the exploitation of the activity of exchange companies to facilitate money laundering or the passage of suspicious funds.
great efficacy
Mohammed Al-Ansari, Chairman of the Exchange and Money Transfer Group in the UAE and Chairman of the Board of Directors of Al-Ansari Exchange Company, said: The Central Bank of the UAE has worked very effectively over the past years, and so far, to ensure that all licensed exchange companies in the UAE understand their responsibilities towards facing money laundering and combating financing terrorism, and the need to put in place effective programs to identify and mitigate the risks of these activities to their operations, and to fully comply with their legal obligations.
Al-Ansari indicated that the Central Bank has significantly increased the fines for violating companies, with the value of the recently imposed fines reaching hundreds of millions of dirhams.
He said: The banking companies in the country are committed to the procedures stipulated for countering money laundering and combating the financing of terrorism, and that there are some aspects that the country is working to develop oversight on an ongoing basis.
Al-Ansari stressed that the evaluation issued by the “FATF” group is a periodic evaluation that takes place every specific period of time, pointing out that the measures taken by the state are sufficient to meet all requirements and standards that enhance confidence in the state’s financial system.
He said: The strict procedures and standards set by the Central Bank during the past years, which impose on exchange companies certain requirements and regulations, human cadres with certain qualifications, and heavy fines, in case of violation, led to the exit of more than 45 exchange companies from the local market during the last four years. .
He pointed out that the new standards require exchange companies to appoint a discipline officer, an internal audit, and a know-your-customer program, and obligate companies to submit daily reports to the Central Bank in accordance with the stipulated rules, and many other measures that enhance transparency and ensure the safety of the financial sector, and prevent any suspicious financial transfers. or violation of laws.
Regulatory frameworks
For his part, Osama Al Rahma, Advisor to the Banking and Money Transfer Group in the UAE, and Head of Business Development at Emirates Investment Bank, said that the UAE was a pioneer in laying the legislative foundations and effective laws criminalizing money laundering, as well as setting regulatory frameworks in the field of control and integrating financial institutions. All of them are under clear and specific systems and oversight bodies.
Al Rahma added: The state has also integrated institutions from outside the financial and banking system, and placed them under supervision that are subject to combating money laundering and terrorist financing.
He explained that the state has made tremendous and strong efforts in the field of training and rehabilitation, which was much greater compared to the rest of the countries in the world, because the state places itself in the context of the global economy, which requires the application of the best international standards and practices. He said: The state exercises these efforts with absolute transparency, jointly and in cooperation with the relevant international institutions and the rest of the countries in the world.
He pointed out that over the past two decades, laws and legislations in the UAE have evolved, in line with global developments in combating money laundering, terrorist financing and suspicious flows. Al Rahma called on the private sector to make unremitting efforts to support these government efforts in this field.
He said: The state is at the fore in global indicators, within the competitiveness statistics, due to the existence of a comprehensive security system, in the field of drug control, anti-administrative corruption and other conditions and factors that prevent the existence of a suitable environment for the movement of suspicious funds, stressing that the UAE is essentially devoid of these factors, Therefore, it does not allow such crimes to occur, as a result of the integrity of the security structure in the state.
international standards
In addition, Amjad Nasr, an expert in Islamic banking, said that the UAE has applied the highest international standards with regard to combating money laundering, and there are laws and standards criminalizing money laundering and terrorist financing approved and enforced in the UAE for many years, noting that the UAE’s commitment to combating financial crime strategic priority.
He indicated that there is a unit in the banks that reports directly to the CEO of the bank that submits periodic reports and is responsible for all instructions, instructions and procedures stipulated in the field of combating money laundering and terrorist financing.
He said: There are programs and electronic systems that monitor the movement of funds and customer remittances, and mark suspicious transactions.
Nasr explained that there are preventive measures taken by banks, including:
Avoid opening accounts for suspicious or prohibited activities, persons or nationalities, or subject to penalties. Banks also adopt procedures for opening accounts, so that accounts are audited if they are sourced from suspicious entities or their funds and transfers are not commensurate with the company’s business volume, where the Central Bank is addressed. about the case.
Likewise, if an individual deposits, transfers, or receives a transfer or deposits an amount or a check that does not correspond to his income, this is verified and the Central Bank is addressed about the case. In addition to transfers of all kinds, if they are not commensurate with the nature of the commercial or investment activity, they shall be verified.
He said: Banks adopt several other programs and procedures, such as know your customer, which is information and data that is renewed annually.
Nasr explained that the measures taken by the Central Bank are sufficient to make the UAE financial system a reliable and clean system of suspicious funds.
He said: This is reflected positively on enhancing the attractiveness of the UAE market for investment, and the soundness of the investment environment in the country.
Financial Action Group (FATF)
The Financial Action Task Force (FATF) is an intergovernmental organization based in Paris, established in 1989. The group studies money laundering and terrorist financing methods and examines trends and techniques related to these activities and the measures necessary to combat them.
It also undertakes the task of preparing and developing policies related to combating money laundering and terrorist financing methods locally and internationally.
The group focuses its efforts on adopting and implementing measures aimed at protecting the financial system, following up on the progress made by member states in implementing the necessary measures in this regard, and cooperating with other relevant international bodies in the field of combating money laundering and terrorist financing, and encourages (FATF) to adopt and implement all appropriate measures to achieve its goals at the global level.
deterrent legislation
Anti-Money Laundering and Combating the Financing of Terrorism and Illicit Organizations Law
Federal Decree-Law No. 26 of 2021 issued on September 13, 2021 states
Concerning countering money laundering crimes and combating the financing of terrorism and the financing of illegal organizations, which is the latest law of the UAE and amending previous laws on the subject, with penalties and administrative fines of up to 5 million dirhams for each violation, for financial institutions, designated non-financial businesses and professions, virtual asset service providers, and non-profit associations For profit, subject to its control when violating any provision of the law.
The law also grants the state’s supervisory authorities the right to suspend directors, members of boards of directors, members of executive or supervisory departments who are proven responsible for the violation, for the period specified by the supervisory authority, and it also has the right to request their change.
Penalties include revocation of the violating institution’s license, or suspension or restriction of practicing the activity or profession for the period specified by the supervisory authority.