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The UAE Central Bank has revoked the license of a dollar exchange house after it failed to keep a required level of paid-up capital and was engaged in money laundering.
The license of a dollar exchange firm operating in the United Arab Emirates has been revoked by the Central bank after the investigations. The authorities identified serious misconduct and weak AML compliance.
The sanctioning of the exchange house comes after the inquiries in which the banking regulator revealed serious misconduct by the firm, it said in a statement on Tuesday (28 Feb 2023).
According to the regulator, “The exchange house failed to maintain the required level of paid-up capital and bank guarantee and was found to have been in default of equity obligations. Furthermore, the exchange house was found to have engaged in serious money laundering misconduct.”
The UAE, the world’s second-largest economy, has introduced several measures to regulate the country’s financial industry in recent months. It has passed strict laws to counter terrorism financing and money laundering, issuing regulations over the reasons to clamp down on financial crime.
Last month, The UAE central bank issued new guidelines for licensed FIs (Financial Institutions), including banks, exchange houses, finance organisations, insurance companies, agents and brokers to counter illicit money transfer and financing of terrorism.
In 2021, the UAE government established the executive office of Anti-Money Laundering and Counter-Terrorism financing. The regulator also introduced hawala providers, informal fund transfer agents operating outside the banking system, to register with it just to strengthen money laundering oversight.
According to the findings, the Dollar exchange had a weak compliance framework and failed to comply with regulatory duties.
As per the statement, the Central bank ensures that all financial firms, their staff and owners abide by the national regulations and laws to safeguard the country’s integrity and transparency of the financial system.