Central Bank of UAE Issues New AML Guidelines to Mitigate Payment Fraud Risks

The Central Bank of UAE has issued new anti-money laundering guidelines to prevent payment frauds and reduce the associated risks.

New anti-money laundering and countering the funding of terrorism (AML/CFT) guidance has been released by the Central Bank of the UAE (CBUAE) for licenced financial institutions (LFIs). This guidance covers the risks associated with payments as well as the preventive measures that LFIs should implement in order to reduce these risks.

The rules, which took effect on August 1 and incorporate Financial Action Task Force standards, will help LFIs better recognise risks and carry out their legal AML/CFT requirements.

Within a month, licenced financial institutions must prove they are in conformity with CBUAE’s rules within a month.

The recommendations state that LFIs should regularly examine their exposure to all payment-related relationships, products, services, and exposure with both domestic and international participants.

The CBUAE has stated that the LFIs are responsible for conducting due diligence on the customers, tracking all the transactions processed or conducted via te LFIs, and reporting suspicious transactions to the UAE’s Financial Intelligence Unit.

The institutions are required to have a sanction compliance programme with operational systems that appropriately screen transactions and transmit the required data throughout the complete payment cycle. In the correspondent relationships, the LFIs should not process any payments for the correspondent unless they are completely confident that the correspondent conducts appropriate screening.

These security measures must be integrated into an LFI’s AML/CFT compliance programme and supported with the governance and training. 

Khaled Mohamed Balama, governor of the CBUAE, said: “We are committed to implementing high regulatory control over LFIs and their payment operations, including products, services and exposure. 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.”

In the recent news, the Central bank of UAE issued its Quarterly Economic Review for the first quarter of 2022, that showed that the insurance sector in the UAE reflected growth, with an increase in total number of insurance policies, gross written premiums and licenced insurance-related entites.

Suggested Read: UAE Central Bank Imposes Financial Sanctions on Six Banks for CDD Failures