The UAE Central Bank has imposed a fine of Dh5.8 million ($1.6 million) on a bank operating in the Emirates for breaching the country's laws on anti-money laundering and counter-terrorism financing (AML/CFT).
The financial sanction follows the findings of an examination conducted by the banking regulator that found the lender had deficiencies in its AML/CFT policies and procedures.
“This is pursuant to Article 14 of the Federal Decree Law No (20) of 2018 on anti-money laundering and combating the financing of terrorism and financing of illegal organisations,” the regulator said on Thursday.
The Central Bank did not name the concerned financial institution.
The UAE, the Arab world’s second-largest economy, has introduced a number of initiatives 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 to clamp down on financial crimes.
The Central Bank unveiled new AML/CFT guidelines last year 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.
In 2021, the UAE also 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.
In 2020, the Ministry of Economy set up an anti-money laundering department to ensure that all non-financial businesses and professionals comply with local laws.
The UAE was removed from the Financial Action Task Force’s grey list this February after significant reform progress.
The FATF is a global body that combats money laundering and terrorism financing.
The decision to take the UAE off the watchdog’s increased monitoring list was made after a comprehensive on-the-ground review of its economy. The Emirates was placed on the grey list in 2022.
The Central Bank said it aims to ensure that all banks, their owners and staff abide by the country's laws, regulations and standards to protect the transparency and integrity of the banking sector and the financial system of the Emirates.
