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

  • Richard Marley
  • July 29, 2022
  • 3 minutes read
  • 71

Six banks in the UAE have been issued financial sanctions by the UAE Central Bank for not complying with the mandatory due diligence and reporting requirements.

The banking regulator mentioned in its statement on Thursday that the banks were charged in accordance with “Cabinet Resolution No. 9 of 2021”, related to the enforcement of certain clauses of the Multilateral Administrative Agreement for Automatic Exchange of Information and Common Reporting Standard (CRS) of the Organization for Economic Co-operation and Development.

No additional information about financial sanctions was provided by the regulatory body.

According to the Central Bank, the CRS is a international methodology used globally for the automatic exchange of financial accounts and tax-related data with other financial regulatory organisations throughout the world via secure channels.

All the banking institutions of the UAE have been provided ample time to implement the CRS as per the central bank reports. The method uses the mandatory data to be exchanged, the sorts of financial institutions that are required to report, as well as the various types of financial accounts and the scope of their holders. It also sets out the common due diligence procedures to that are to be followed by the financial institutions.

The Central Bank said it was “committed to complying with all regulations aimed at strengthening the nation’s financial and banking system”.

“This supports the UAE’s commitment to global initiatives to enhance the integrity and transparency of tax systems and combat tax evasion,” it said.

The Central Bank has introduced various number of initiatives to regulate the country’s financial industry in recent times.

These include the formation of rules to assist regulated exchange houses in preventing money laundering and the funding of terrorism, as well as an improved regulatory framework to monitor banks’ exposure to the real estate market.

In an effort to improve oversight of money transfers, the regulator also sent registration instructions to all hawala providers—informal fund transfer intermediaries operating outside the banking system—last year.

This week, the Central Bank said that it had fined an exchange house operating in the nation for not meeting the necessary standards of compliance with anti-money laundering laws.

The Banking regulator imposed a fine of Dh5.2 million ($1.4m) over the exchange house in accordance with the law on AML, combatting the financing of terrorism and illegal firms.

Suggested Read: UAE Issues a Total of $11 Million in Fines for AML Offences in First Half of 2022