The Central Bank of the UAE (CBUAE) has issued a new anti-money laundering (AML) guide and combatting the financing of terrorism (AML/CFT) for licensed financial institutions (LFIs) on risks related to politically exposed persons (PEPs), the regulator announced on 2 August 2022.
The guidance requires Licensed Financial Institutions to demonstrate compliance with its requirements within one month.
The Central Bank has also asked financial institutions to not process any payments for a correspondent unless they are entirely confident that the correspondent conducts appropriate screening.
They are also required to conduct ongoing monitoring of the business relationships. LFIs should also maintain transaction monitoring systems equipped to identify patterns of unusual or suspicious activity and report any behavior linked to money laundering, financing of terrorism, or a criminal offense to the UAE’s Financial Intelligence Unit using the “goAML” portal.
The guidance focuses on the money laundering and the financing of terrorism risks relating to payments and preventive measures that licensed financial institutions (LFIs) should apply in order to mitigate risks.
“As new payment products and services might bring risks to the financial system because of the rapid movement of funds between payment participants and across borders, and LFIs might be exposed to participants licensed by the CBUAE and those operating globally, LFIs should take a risk-based approach to mitigate and manage money laundering and the financing of terrorism risks,” the Central Bank said.
According to the guidelines, LFIs should conduct a regular risk assessment to cover all the payment products, services, relationships, and exposure to domestic and foreign payment sector participants.
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