UAE Central Bank revokes exchange house’s licence for misconduct

Investigation found Dollar Exchange failed to maintain the required level of paid-up capital and engaged in money laundering

The UAE Central Bank has introduced various measures to regulate the financial sector in recent months. Photo: UAE Central Bank
Powered by automated translation

The UAE Central Bank has revoked the licence of an exchange house operating in the Emirates and struck its name off the register for regulatory misconduct and weak compliance.

The sanctioning of the exchange house comes after an investigation by the banking regulator uncovered serious regulatory misconduct by Dollar Exchange, it said in a statement on Tuesday.

“The exchange house failed to maintain the required level of paid-up capital and bank guarantee and was found to have been in default of equity obligations,” the regulator said.

“Furthermore, the exchange house was found to have engaged in serious money laundering misconduct.”

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

It has passed strict laws to prevent money laundering and the financing of terrorism, and has issued regulations over the years to clamp down on financial crime.

The UAE Central Bank issued new guidelines last month for licensed financial institutions — including banks, finance companies, exchange houses, insurance companies, agents and brokers — to combat money laundering and the financing of terrorism.

In 2021, the UAE established the Executive Office of Anti-Money Laundering and Counter-Terrorism Financing. 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.

In 2020, the Ministry of Economy set up an anti-money laundering department to ensure that all non-financial businesses and professionals complied with the law.

Dollar Exchange had a weak compliance framework and failed to comply with its regulatory obligations, the findings showed.

The time set for submitting an appeal has expired and none was filed, the regulator said.

The Central Bank works to ensure that all exchange houses, their owners and staff abide by the UAE laws and regulations to safeguard the transparency and integrity of the country’s financial system, the statement said.

Updated: February 28, 2023, 8:34 AM