UAE Central Bank fines lender $1.36m for breaching anti-money laundering rules

Financial institution had violated three articles of the Emirates' financial laws

The UAE Central Bank continues to safeguard the transparency and integrity of the nation's financial system. Wam

The UAE Central Bank has fined a lender operating in the country Dh5 million ($1.36 million) for breaching anti-money laundering regulations, as it continues its fight against illicit financial activity in accordance with international standards.

The bank, which was not identified by the banking regulator, was in breach of three articles of laws regarding the organisation of financial institutions, anti-money laundering and terrorist financing, the central bank said in a statement on Monday.

In addition to the penalty, the bank was directed to present the decision to its board of directors at its overseas headquarters, it said.

The central bank, "through its supervisory and regulatory mandates, works to ensure that all banks, their owners and staff abide by the UAE laws, regulations and standards adopted ... to safeguard the transparency and integrity of the banking industry and the UAE financial system", it said.

The UAE has made significant strides in the fight against financial crime in recent years. Effective policies on anti-money laundering and combating the financing of terrorism are key to the integrity and stability of the international financial system and the economies of nations, according to the International Monetary Fund.

Globally in 2023, financial institutions were hit with about $6.6 billion in fines related to anti-money laundering breaches, a 57 per cent jump from the previous year, the latest data from London-based information services company Gatenox found.

The UAE this month announced a nationwide action plan aimed at boosting its fight against illicit financial activity by introducing the 2024-27 National Strategy for Anti-Money Laundering, Countering the Financing of Terrorism and Proliferation Financing.

The strategy has 11 goals outlining the “legislative and regulatory reforms the UAE is taking to prevent the impact of illegal activities on society”, and was developed by the General Secretariat of the National Committee using World Bank Group methodology to ensure it meets international standards.

In August, the government amended its laws on anti-money laundering, and the financing of terrorism and illegal organisations. A National Committee for Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organisations has been formed as a result.

In 2021, the government founded an Executive Office for Anti-Money Laundering and Counter-Terrorism Financing after passing an anti-money laundering and terrorism financing law in 2018.

The UAE Central Bank last month imposed a fine of Dh5.8 million on a bank operating in the Emirates for a similar breach of the country's anti-money laundering laws.

The value of fines imposed by regulatory authorities in the field of Anti-Money Laundering and Counter-Terrorism Financing between January and October last year reached Dh249.2 million, up from Dh76 million in 2022.