The UAE Central Bank is to conduct a “special and urgent examination” into the activities of Banque Misr's branches in the country after the US warned of money-laundering concerns.
The probe into the Egyptian lender will include “a forensic/in-depth lookback covering the period referred to in the statement issued by the US authorities, with a focus on banking transactions of the companies mentioned in the statement”, the Central Bank said in a statement on Saturday.
The US Department of the Treasury’s Financial Crimes Enforcement Network proposed a rule that would revoke Banque Misr UAE’s correspondent banking access to US financial institutions over the money-laundering concerns.
The UAE Central Bank said it had reviewed the statement by the US authorities. “Branches of Banque Misr operating in the UAE are subject to the laws and regulations in force in the UAE,” the regulator said. Banque Misr has five branches in the UAE, according to its website.
The Central Bank said it expects lenders licensed in the country “not to expose the UAE’s financial system to reputational risks, to respect the laws and regulations of the countries whose financial institutions are used in conducting transactions, and not to misuse the advanced financial infrastructure of the UAE”.
The regulator also stressed that it periodically examines the procedures for anti-money laundering and counter-terrorism financing (AML/CFT) at banks operating in the UAE.
It also verifies the effectiveness of sanctions screening and other systems, and requires banks to enhance these procedures.
“The Central Bank is currently studying the available options regarding the status of the bank in the event it is decided to impose the special measure against it after completing the procedures in accordance with US laws,” the regulator said.
“The appropriate decision in this regard will be taken in due course, taking into consideration the obligations of the bank towards its customers in the UAE.”
The regulator has been cracking down heavily on financial entities that violate UAE laws and regulations.
In June, the branch of a foreign bank in the UAE was fined Dh20 million ($5.44 million) for breaking anti-money laundering rules – one of the biggest financial penalties imposed. The Central Bank said the branch was found to have committed “significant, repeated failures” under its AML/CFT and illegal organisations and sanctions framework.
