The Central Bank of the UAE (CBUAE) issued new guidance on anti-money laundering and combatting the financing of terrorism (AML/CFT) for financial institutions dealing with property brokers and dealers of precious metals and stones.
The guidance sets out some of the issues associated with high-value assets potentially being used by criminals "to conceal, transfer and/ or invest their illicit proceeds" through the financial system.
“A critical part of CBUAE’s mandate is to ensure that all licensed financial institutions have a deep comprehension of their role in mitigating and addressing the risk of illicit activities in the UAE’s financial system," CBUAE governor Khaled Al Tameemi said.
There is a strong awareness about anti-money laundering rules in the Middle East and North Africa, with 76 per cent of institutions in the region stating they have an AML programme in place, according to Refinitiv's Financial Crime Mena survey published on Tuesday. A quarter of respondents highlighted money laundering as the financial crime that represents the biggest risk to their organisation, more than any other issue such as fraud or cyber crime.
The guidance issued by the central bank says dealers of precious metals pose a risk to licensed financial institutions "because they are themselves at high risk of abuse". Precious metals such as gold are "easy to exchange and transfer, and may provide anonymity when processing transactions".
Precious metals and stones can be illegally mined or used to legitimise the proceeds of drug trafficking and other illegal activities, as well as for sanctions evasion or as security for fraudulent loans, the guidance points out.
Property can be used to launder large sums of cash in one transaction, sometimes through various shell companies or intermediaries.
The guidance reiterates that financial institutions "are required to perform appropriate customer due diligence and report any behaviour that they reasonably suspect may be linked to money laundering" or other criminal offences to the UAE’s Financial Intelligence Unit through the "goAML" platform.
"This guidance serves as a key point of reference for those providing services to real estate and precious metals and stones sectors and is set to further increase the efficacy of licensed financial institutions in contributing to the stringent national efforts in the field of AML/CFT,” Mr Al Tameemi said.