UAE Central Bank fines exchange house Dh3.5m for failure to comply with anti-money laundering law

Banking regulator has been clamping down on offenders in recent weeks

The UAE Central Bank has imposing fines worth hundreds of millions of dirhams on financial entities that defy anti-money laundering regulations. Photo: UAE Central Bank

The UAE Central Bank imposed a fine of Dh3.5 million ($953,029) on an exchange house for failing to comply with the country's law on anti-money laundering and counter-terrorism financing (AML/CFT), as it continues its crackdown on financial crimes.

The Central Bank said on Monday that it assessed the findings of an examination that revealed offences by the exchange house, which was not named.

It has been cracking down on regulatory non-compliance in recent weeks.

Last week, it imposed a Dh100 million fine on an exchange house for “significant failures” in its AML/CFT framework and related regulations.

The regulator last month also fined an exchange house Dh200 million for the same offence. A Dh500,000 fine was also imposed on a branch manager, who was banned from working in any licensed financial institutions in the UAE.

The Central Bank also fined two branches of foreign banks operating in the country a total of Dh18.1 million last week for breaching anti-money laundering regulations.

“The UAE Central Bank, through its supervisory and regulatory mandates, endeavours to ensure that all exchange houses, their owners, and staff abide by the UAE laws, regulations and standards … to maintain transparency and integrity of the financial transactions and safeguard the UAE financial system,” it said.

The UAE has introduced a series of initiatives to regulate the country’s financial sector and has passed strict laws to prevent money laundering and the financing of terrorism.

The Central Bank unveiled AML/CFT guidelines in 2023 for licensed financial institutions – including banks, finance companies, exchange houses, insurance companies, agents and brokers.

The guidelines focus on the use of digital identification systems by licensed financial institutions to address customers' due diligence obligations.

Last year, the UAE also announced an action plan to boost its fight against illicit financial activity, introducing the 2024-2027 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”. It 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 against money laundering and the financing of terrorism and crime groups and formed a national committee on these crimes.

In 2021, the UAE also established the Executive Office of Anti-Money Laundering and Counter-Terrorism Financing, an agency to deal with money launderers, as well as organisations and people suspected of financing terrorists and organised crime.