Strict anti-laundering rules apply to Dh2,000 dealings

The Central Bank introduces new guidelines for small financial transactions to help prevent money laundering.

ABU DHABI // The Central Bank has ordered financial institutions to register the details of anyone wiring or changing as little as Dh2,000 (US$544) as part of moves to prevent money laundering. Under guidelines issued worldwide by the Financial Action Taskforce, a body run by the International Monetary Fund (IMF), every country must take measures to prevent money laundering. The guidelines are made up of 40 anti-laundering recommendations the financial sector must adopt, with a further nine recommendations later added relating to money laundering specifically for funding terrorism.

The Central Bank circular says that anyone who wishes to change more than Dh2,000 must register their name, address and account number. They can also be subject to questions about the origin and destination of the money. Anyone wanting to wire more than Dh3,500 through a bank must register their details and may face further scrutiny. The limit is several thousand dirhams lower than the figures previously put in place by banks.

Although security measures have existed for exchanges of a certain value in the past, the new regulations are intended to keep track of considerably more transactions. The circular, sent out to all banks and money exchanges, said: "All banks and other financial institutions, as well as their board members, managers and employees, are personally obliged to report any suspicious transactions that may be related to criminal, terrorist or terrorism financing activities to the manager of the Anti Money-Laundering and Suspicious Cases Unit."

It was their responsibility, said the circular, to "establish the identity of the owners and beneficiaries of the companies and all transactions related to account opening and money deposits, and obtain satisfactory evidence of their identity". Sultan Nasser al Suwaidi, the governor of the Central Bank, said the UAE had implemented 80 per cent of the measures demanded by the IMF. The UAE, he said, was not a safe haven for money launderers. In June, Mr Suwaidi said the UAE was doing more than ever to scrutinise suspicious banking activities, such as large deposits or withdrawals.

Banks were acting faster than ever when they suspected laundering, he said: "This is because the awareness of banks is increased, the awareness in society is increased and appreciation for these efforts is increasing." A report by the Financial Action Taskforce on money laundering and the UAE will be published later this year. The Central Bank met to discuss its response to the report in June. In 2007, money transfers from the country totalled Dh31.95 billion, much of which was sent from workers to their families in poorer countries. The figure was a 13.78 per cent increase on 2006, when Dh28.08 billion was sent abroad.

Cameron Walker, a law-enforcement co-operation counsellor with the British Embassy, is the UK government's main representative on anti-money laundering issues in the UAE. "It is a gesture [by the UAE], but one that has been imposed on them," he said. "I am a great believer that you do not want to overburden the financial sector by getting them to report financial transfers that, quite frankly, at Dh2,000, are not that much. You are going to question just about everybody.

"I transferred £4,000 (Dh28,232) recently for my son to buy a car, and was given the third degree. "Tens of thousands of people are going to be registered. When you do that, you can't see the woods from the trees. If you are looking at proceeds of crime, you have to be looking at regular sums equivalent to thousands of pounds going out weekly. Most mortal beings are just not making that kind of money.

"Mohammed Anwar, the head of compliance with Al Ansari Exchange, said: "To stop money laundering, it is the right move to take by the Central Bank. "In this part of the world, more than 80 per cent are expatriates, and a lot of their money is going home to their families or to go towards their savings. It could be difficult for those people." Mr Anwar said the figure of Dh3,500, at which point people must explain where the money is going, was "very low" but correct.

A spokesman for the Indian Embassy in Abu Dhabi said they had not been made aware of the changes to regulations, and had, so far, not received any complaints from Indian nationals about the new process of wiring money home. Central Bank statistics show the country has 768 branches of national and international banks, 57 money exchange shops and 44 electronic banking service units. @email:rhughes@thenational.ae

* With additional reporting by Mufleh Ayyash

Published: August 11, 2008 04:00 AM

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