The UAE Central Bank imposed a fine of Dh4.1 million ($1.1 million) on three exchange houses for failing to comply with the law on anti-money laundering and counter-terrorism financing (AML/CFT), as it continues its fight against illegal financial activity.
Financial sanctions were imposed after investigations revealed the three exchange houses failed to comply with AML/CFT policies and procedures, the Central Bank said on Monday. It did not disclose the names of the exchange houses.
The banking regulator has been cracking down heavily on regulatory non-compliance. Last week, it imposed a fine of Dh5.9 million on a branch of an unnamed foreign bank operating in the UAE for failing to comply with the AML/CFT framework and related regulations.
In June, the Central Bank imposed a Dh100 million fine on an exchange house for “significant failures” in its AML/CFT framework. Also last month, the Central Bank suspended the Islamic window of a bank operating in the country from onboarding new customers for six months and fined it more than Dh3.5 million for non-compliance with Sharia governance rules.
An Islamic window is a unit within a conventional bank through which customers are offered banking services and products complying with Sharia principals.
The sanctions were imposed after the banking regulator's Sharia supervision examination, the Central Bank said on Wednesday. The name of the lender was not disclosed.
In May, the regulator also fined an exchange house Dh200 million for the same offence. A Dh500,000 fine was imposed on a branch manager, who was barred from working in any licensed financial institutions in the UAE.
"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," the Central Bank said in a statement on Monday.
The UAE has introduced a series of initiatives to regulate the country’s financial sector and 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 Emirates announced an action plan to boost its fight against illicit financial activity, introducing the 2024-2027 National Strategy 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”.
In August, the government amended its laws against money laundering and the financing of terrorism and crime groups and formed a national committee on such crimes.
In 2021, the UAE 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.
