UAE Central Bank imposes sanctions on six banks for compliance failure

The unnamed lenders failed to achieve appropriate levels of compliance regarding required due diligence and reporting procedures and standards

The UAE Central Bank has introduced a number of measures to regulate the country’s financial sector in recent months. Sammy Dallal / The National
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The UAE Central Bank imposed financial sanctions on six banks operating in the Emirates for failing to comply with required due diligence and reporting procedures and standards.

The unnamed banks were fined as per “Cabinet Resolution No. 9 of 2021”, related to the enforcement of certain provisions of the Organisation for Economic Co-operation and Development’s Multilateral Administrative Agreement for Automatic Exchange of Information and Common Reporting Standard (CRS), the banking regulator said in a statement on Thursday.

It did not provide further details on financial sanctions.

The CRS is a global methodology for the automatic exchange of financial accounts and tax-related information with other financial regulatory organisations across the world through secure channels, according to the central bank.

All banks operating in the UAE have been allowed ample time to put in place the CRS, it said.

The methodology sets out the required information to be exchanged, the types of financial institutions required to report, the different types of financial accounts and account holders in scope, as well as the common due diligence procedures to be followed by 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 move comes as the Central Bank has introduced a number of initiatives to regulate the country’s financial sector in recent months.

These include an enhanced regulatory framework to supervise banks’ exposure to the property sector and the issuance of guidelines to help licensed exchange houses combat money laundering and the financing of terrorism.

Last year, the regulator also instructed all hawala providers — informal fund transfer agents operating outside the banking system — to register in an effort to strengthen supervision of money transfers.

The Central Bank this week said it had 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 illegal organisations.

Updated: July 28, 2022, 7:33 AM