Public asked to stay clear of unlicensed charities, firms

Abu Dhabi: The UAE Central Bank has cautioned the general public against donating to charitable associations and investment companies which are not licensed and registered in the UAE, to prevent fraud and the misuse of funds.

In a cautionary notice, the apex bank's Anti-Money Laundering and Suspicious Cases Unit (AMLSCU) alerted all UAE nationals, expatriates and business institutions operating in the country to "exercise utmost care and caution while dealing with charitable institutions and investment companies.

"While the UAE provides great investment opportunities, be wary of entities which are not licensed and registered by the competent authorities in the UAE in order to avoid being deceived by such entities," said the notice.

It urges members of the public to refrain sharing sensitive information — such as one's user identifier, password, personal identification number, credit verification code, personal account number and international bank account number — if approached by any individual or company for investments and/or donations.

"You may be enticed through seemingly attractive prize money [offered by] fraudulent lottery schemes and fall prey to identity theft," the AMLSCU warned.

The Central Bank unit said that the general public should ensure donations, in cash or any other form, are only made to charitable organisations licensed and registered by the Ministry of Social Affairs or by the respective local government authorities.

Exposure to fraud

"The AMLSCU emphasises that donations made to charitable organisations which are not licensed and registered by the competent authorities in the UAE may be exposed to fraud and/or otherwise misused," the Central Bank statement warned.

"Therefore, donors must be careful, cautious and vigilant while dealing with charitable organisations."

Mousa Haddad, National Bank of Abu Dhabi Asset Management head trader, told Gulf News: "The Cental Bank is being transparent and is trying to create greater awareness for investors to stay away from companies that are not licensed and regulated by government entities such as [the] DIFC or SCA."

Haddad added: "The Central Bank wants to protect investors' rights and increase corporate governance in the country. It is trying to limit the extent of money laundering and financial malpractices to keep the UAE a healthy place for investments, which, in time will have a positive influence in attracting [a] greater number of institutional and global investors into the country."

Funds

The notice also said the general public should not send or receive funds to or from unknown persons for investments or any other reasons, in order "to avoid being held accountable in case the recipients/remitters of funds commit any illegal acts."

Commenting on the Central Bank's cautionary notice, Mohammad Amerah, an Abu Dhabi-based economist, told Gulf News that the Central Bank wants to protect the public from being cheated by unauthorised or illegal organisations that work without proper licenses or authorisation from the concerned authorities.

"The awareness about certain financial malpractices prevalent in the system is going to make donations more effective and ensure they reach the targeted people for whom [they are] meant for," Amerah added.

"This is the idea and a commendable [step] by the Central Bank in the right direction."