The Central Bank issues new guidelines for licensed financial institutions regarding political persons who represent 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 risky political persons.
The new guidelines contribute to developing the understanding of licensed financial institutions about risks and the effective implementation of their legal obligations related to combating money laundering and combating the financing of terrorism, and enhancing their compliance with the standards and directives issued by the Financial Action Task Force (FATF).
Licensed financial institutions are required to demonstrate compliance with the requirements in the new guidelines within one month from the date of issue.
Under the new guidelines, authorized financial institutions are required to carry out specific mandatory due diligence measures for political risk persons, their immediate family members, or close associates, in addition to the required due diligence towards all customers, as authorized financial institutions may be exposed to increased risks of money laundering and financing. Terrorism and the financing of other illegal activities by clients of risky political persons and their financial transactions related to them.
Licensed financial institutions that provide services to clients of PEPs should develop risk-based policies in their anti-money laundering programs to ensure that clients and the identity of appropriately PEPs or related clients are identified prior to initiating a business relationship. Classify risks and apply appropriate due diligence procedures with clients, as well as continuous monitoring of their business relationship.
Licensed financial institutions must maintain transaction monitoring systems equipped to identify patterns of unusual and potentially suspicious activities, as they must report any suspicious behavior potentially related to money laundering, terrorist financing or a criminal offense, by submitting a report to the UAE Financial Information Unit using the goAML portal.
These safeguards should also be incorporated into the compliance program of authorized financial institutions to counter money laundering and combat the financing of terrorism and be supported with appropriate governance and training.
UAE Central Bank Governor Khalid Mohammed Balama said, "We are keen to enhance and ensure a comprehensive understanding of all licensed financial institutions of their role and responsibilities in mitigating risks related to countering money laundering and combating terrorist financing, and protecting the financial system in the UAE from illegal activities. These guidelines contribute The new law aims to provide more requirements and measures that help authorized financial institutions to fulfill their obligations in this regard before and after the start of business relationships with political risk persons.
His Excellency added: "We will continue our efforts to issue similar regulatory guidelines to ensure enhancing the efficiency and robustness of the financial system in the country, in line with international standards related to combating money laundering and combating the financing of terrorism."
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