The Central Bank issues new guidelines for licensed financial institutions regarding payments risks
The Central Bank of the UAE has issued new guidelines to counter money laundering and combat the financing of terrorism for licensed financial institutions regarding risks related to payments.
The new guidelines, which entered into force as of today, contribute to financial institutions' understanding of risks, the effective implementation of their legal obligations related to combating money laundering and combating the financing of terrorism, and enhancing their observance of the standards of the Financial Action Task Force (FATF).
Licensed financial institutions are required to demonstrate compliance with the requirements set out in the new guidelines within one month.
The new guidelines focus on the money laundering and terrorist financing risks associated with payments, and the preventive measures that authorized financial institutions should implement to mitigate them, as new payment products and services can bring risks to the financial system due to the rapid movement of funds between payment participants and across borders.
These institutions may be exposed to the risk of exposure from participating entities licensed by the Central Bank or from entities operating globally, which must adopt a risk-based approach to managing and mitigating the risks of money laundering and terrorist financing, in addition to the need to conduct a regular risk assessment to cover all risks. Payment products, services, relationships, and exposure risks to domestic and external parties involved in the payment sector.
Licensed financial institutions are responsible for taking appropriate customer due diligence measures, examining all transactions they process or making, and reporting suspicious transactions to the UAE Financial Information Unit.. They should also have a sanctions compliance program, with operating systems to screen transactions to a degree. appropriate and send the required information throughout the payment process cycle.
In the area of banking relations with correspondents, authorized financial institutions should not process any payments to the bank correspondent unless they are fully confident that the correspondent is performing the appropriate screening process.. They should also integrate these safeguards into the compliance program of licensed financial institutions to combat money laundering and combating money laundering and combating money laundering. Financing terrorism, and supporting it with governance and training.
In this regard, the Governor of the Central Bank of the UAE Khalid Mohammed Balama said: "We are committed to applying high regulatory controls on licensed financial institutions and their payment processes, including products, services and exposure. The new guidelines help ensure that licensed financial institutions in the country understand their responsibilities towards facing Money laundering and terrorist financing, in addition to having effective compliance programs to identify and mitigate payment-related risks.
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