Central Bank of UAE fines exchange house for compliance failure

The Central Bank of the UAE has penalised an exchange house operating in the country for failing to achieve the appropriate levels of compliance with anti-money laundering regulations.

The banking regulator imposed a fine of Dh5.2 million ($1.4m) against the exchange house in accordance with the law on anti-money laundering, combating the financing of terrorism and the financing of illegal organisations.

“The financial sanction comes as a result of the examination findings conducted by the CBUAE and revealed that the exchange house had a weak compliance framework regarding the required due diligence policies and procedures to prevent money laundering and financing of terrorism,” the central bank said in a statement on Wednesday.

The UAE, the Arab world’s second-largest economy, has strict laws to prevent money laundering as well as the financing of terrorism and has consistently issued regulations over the years to clamp down on financial crime.

Last year, the country established the Executive Office of Anti-Money Laundering and Counter-Terrorism Financing, an agency to deal with money launderers, organisations and people suspected of financing terrorists and organised crime.

In November 2020, the Ministry of Economy set up a new anti-money laundering department to ensure that all non-financial businesses and professionals comply with local laws.

Last year, Dubai set up a special court that focuses on fighting money laundering and other financial crimes to strengthen the integrity of its financial system.

The central bank works to ensure that all exchange houses and their staff abide by the UAE laws to safeguard the transparency and integrity of the country’s financial system, the regulator said.

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Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.

Education: Sagesse University, Beirut, Lebanon, in 2005.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks.

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.

8. Pillar 2 implementation

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances

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Nazanin Zaghari-Ratcliffe was born and raised in Tehran and studied English literature before working as a translator in the relief effort for the Japanese International Co-operation Agency in 2003.

She moved to the International Federation of Red Cross and Red Crescent Societies before moving to the World Health Organisation as a communications officer.

She came to the UK in 2007 after securing a scholarship at London Metropolitan University to study a master's in communication management and met her future husband through mutual friends a month later.

The couple were married in August 2009 in Winchester and their daughter was born in June 2014.

She was held in her native country a year later.