The Central Bank of the UAE (CBUAE) has issued a new guidance on anti-money laundering (AML) and combatting the financing of terrorism (CFT) for licenced financial institutions (LFIs) on risks related to politically exposed persons (PEPs), the regulator announced on Tuesday.
The guidance, which comes to effect immediately, “will assist LFIs’ understanding of risks and effective implementation of their statutory AML/CFT obligations, and takes Financial Action Task Force (FATF) standards into account,” WAM said in a statement, adding LFIs must comply with the regulator within a month.
PEPs and transactions related to them may expose LFIs to a higher risk of money laundering and terror financing, the lender said.
The guidance is set in place to enable LFIs to carry out due diligence on PEPs and their direct family members or close associates.
“We are keen to ensure that all LFIs comprehensively understand their role and responsibilities in mitigating relevant AML/CFT risks and safeguarding the UAE financial system from illicit activities,” CBUAE’s governor Khaled Mohamed Balama said.
Balama added this guidance provides LFIs with further requirements and measures they must fulfil before and after initiating business relationships with PEPs to stay compliant of anti-money laundering.
LFIs providing services to PEPs must develop risk-based policies, the lender said, adding this would ensure accurately identified PEPs or related customers prior to the start of the business relationship, risk rating and applying equivalent customer due diligence.
The regulator also said LFIs must constantly monitor business relationships and maintain a transaction monitoring system in order to track suspicious transactions.
Any unusual activity would then be reported to the UAE’s financial intelligence unit, using the ‘goAML’ portal.
The UAE central also renewed anti-money laundering policies for risks related to payments recently.
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