Today's Edition
ABU DHABI (WAM)
The Central Bank of the United Arab Emirates (CBUAE) has issued updated guidance on Anti-Money Laundering, Combating the Financing of Terrorism and Proliferation Financing (AML/CFT/CPF), in alignment with international best practices and covering several key supervisory aspects.
These updates aim to enhance the regulatory framework and strengthen the effectiveness of the financial sector's compliance systems, in line with (AML/CFT/CPF) requirements.
This regulatory guidance reflects the CBUAE’s firm commitment to safeguarding the integrity of the UAE’s financial system and mitigating local and international financial crime risks.
Aligned with the National Strategy (2024-2027), the highest international standards and the requirements of the Financial Action Task Force (FATF), this package of guidance and best practices will empower licensed financial institutions (LFIs) and Registered Hawala Providers (RHPs) to better understand money laundering, terrorist financing, and proliferation financing risks.
It will also enable them to implement proactive measures to detect and prevent suspicious activities, contributing to solidifying the UAE’s leading position as a secure and stable global financial hub.
The package included four key regulatory guidance documents, along with two best-practice manuals.
The four key regulatory guidance documents include: Guidance on Risks Related to Proliferation Financing (PF), which aims to elevate compliance levels and enhance the financial sector’s efforts in mitigating proliferation financing risks.
It outlines three key components of an effective CPF framework: first, the assessment of inherent PF risk; second, the evaluation of policies, procedures, and controls in place to counteract those risks and implement remedial actions where gaps or weaknesses are identified; and third, it sets out expectations to continuously monitor emerging risks associated with PF, including identifying new trends, typologies, and parties involved in potential PF activity.
Guidance on Risks Related to Trade-Based Money Laundering (TBML) and Transshipment: The guidance focuses on supporting LFIs and RHPs in developing a deeper understanding of money laundering, terrorist financing and proliferation financing risks associated with trade and transshipment.
The Guidance aims to enhance readiness to monitor and manage these risks effectively, ensuring full compliance with the legal and regulatory frameworks in the UAE.
Guidance on Correspondent Banking and Expectations for Managing Correspondent Banking Relationships: Aims to improve the LFIs and RHPs’ understanding and ability to monitor the AML/CFT/CPF risks associated with correspondent banking services.
It also assists institutions providing these services in formulating internal policies and procedures that comply with the UAE’s legal frameworks, ensuring their operations align with the new guidance for effectively managing risks arising from correspondent banking relationships.
Guidance on Customer Due Diligence (CDD), Know Your Customer (KYC) Requirements, and Record Keeping: This guidance is designed to improve understanding and clarify expectations of how LFIs and RHPs can appropriately verify their customers’ identities and assess their exposure to ML/TF/PF risks, from the onboarding stage and throughout the duration of their relationship.
The guidance outlines the core principles that supervised institutions must consider when building a customer risk profile, clarifying simplified and enhanced due diligence procedures, and specifying the types of data and documentation that must be retained on record.
Best practice manuals on risk assessment and training include: Best Practices on Implementing a Risk-Based Approach and Conducting Risk-Based Institutional Risk Assessments, which aim to enhance LFIs’ and RHPs’ understanding and awareness of their legal and regulatory obligations to implement a risk-based approach and conduct risk-based institutional risk assessments.
These best practices set out how to develop methodologies for assessing institutional ML/TF/PF risks, while providing a practical framework for implementing counter-measures proportionate to the scale and nature of the identified risks.
Best Practices on Implementing Role-Based Training on AML/CFT/CPF: These practices aim to improve LFIs ability to meet their obligations in relation to developing the capabilities of employees and senior management.
They set out frameworks for designing specialised training programmes that enhance the efficiency of early detection of suspicious activities.
This contributes to mitigating ML/TF/PF risks, in accordance with the highest professional standards.
Governor of the CBUAE, said, "The issuance of this new regulatory guidance package reflects the CBUAE’s commitment to solidifying the UAE’s leadership in Anti-Money Laundering and Combating the Financing of Terrorism and Proliferation Financing, in line with the highest international standards, and enhancing its position as a secure and trusted global financial hub.
At the CBUAE, we aim through these guidelines to raise awareness within the financial sector and enable Licensed Financial Institutions and Registered Hawala Providers (RHPs) to monitor emerging risks and prevent them effectively, efficiently, and responsibly. We are moving forward in developing a robust national framework to combat financial crimes, establishing a resilient financial system, and actively contributing to safeguarding the stability of the global financial system."
