UAE Central Bank imposes $286,000 fine on exchange house for compliance failures

Regulator says company conducted its activities outside its licensed premises and did not use an approved cash-in-transit agent

The UAE's banking regulator works to ensure that exchange houses abide by the laws of the country’s financial system. Photo: UAE Central Bank

The UAE Central Bank has imposed a fine on an exchange house in the country for failing to achieve the appropriate levels of compliance with financial activity regulations.

The banking regulator fined the exchange house Dh1.05 million ($285,908) for “violating its obligation to conduct exchange activities in the licensed premises only, to use an approved cash-in-transit agent when transporting cash and for violating its obligation to immediately report violations to the central bank”, it said on Friday.

The central bank did not name the exchange house.

The UAE, the Arab world’s second-largest economy, has introduced a number of initiatives to regulate the country’s financial sector in recent months.

It has also passed strict laws to prevent money laundering, as well as the financing of terrorism, and has 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 2020, the Ministry of Economy set up an anti-money laundering department to ensure that all non-financial businesses and professionals comply with local laws.

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

Dubai set up a special court last year 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 in place to protect the transparency and integrity of the country’s financial system, the regulator said.