Foreign bank branch in UAE fined Dh200 million

Dubai: The Central Bank of the UAE has imposed a financial penalty of Dh200 million on a branch of a foreign bank licensed in the UAE, pursuant to the provisions of the Federal decree law regarding the Central Bank and organization of financial institutions and activities.

The financial penalty is based on the results of the findings of examinations conducted by the CBUAE, which revealed that the branch had significant, repeated failures in its anti-money laundering and combating the financing of terrorism and illegal organisations, governance and compliance management and sanctions framework.

The CBUAE further imposed an individual penalty of Dh500,000 on the CEO, and an individual penalty of Dh300,000 on the Head of Compliance and Money Laundering Reporting Officer.

The CBUAE has asked the foreign bank to implement a mandatory remediation programme under independent validation and a fit and proper re-assessment of the CEO and the chief compliance officer.

Similar fines on financial institutions

The Dh200 million penalty is the biggest to hit a bank this year. It matches the Dh200 million fine that was imposed on an exchange house in May 2025.

On June 24, the Central Bank fined another foreign bank branch Dh20 million for repeated failures in anti-money laundering, terror financing and sanctions controls. It also fined that branch’s Head of Compliance and Money Laundering Reporting Officer Dh300,000.

Similarly in July, it imposed Dh1.82 million on another foreign bank branch. This case pertained to a consumer protection breach and not particularly AML charges. Here, the central bank found that the branch had failed to issue a liability letter within the mandated seven-day period.

What the terror financing guidelines require

On April 16, the Central Bank issued an updated package on anti-money laundering, combating the financing of terrorism and proliferation financing. These rules follow the Financial Action Task Force standards and the UAE’s National AML/CFT Strategy 2024 to 2027. It applies to licensed financial institutions and registered hawala providers operating in the region.

It has four guidance documents and two best-practice manuals. The four guidance documents cover:

1. Proliferation financing: Banks must assess their inherent risk and test the controls that reduce it. They must also keep tracking new trends and typologies.

2. Trade-based money laundering and transshipment: This covers laundering, terror financing and proliferation risks tied to international trade flows.

3. Correspondent banking: Banks need written policies for these relationships, including ongoing due diligence and information exchange.

4. Customer due diligence, KYC and record keeping: Banks must build a risk profile for each customer from onboarding onward. They must apply simplified or enhanced checks as the risk requires, and keep the supporting records.

Federal Decree-Law No. 10 of 2025 took effect on October 14, 2025. It makes proliferation financing a standalone offence alongside money laundering and terror financing.

Through its supervisory and regulatory powers, the CBUAE wants to ensure that banks, their senior decision makers and their staff follow UAE laws and the rules according to the standards it sets. The aim is to protect the transparency and integrity of the banking sector and the wider UAE financial system.