Abu Dhabi: The Central Bank of the UAE (CBUAE) released new guidelines aimed at combatting money laundering and the financing of terrorism (AML/CFT) within the Licensed Financial Institutions (LFIs) sector.
These guidelines apply to banks, finance companies, exchange houses, payment service providers, registered hawala providers, insurance companies, agents, and brokers.
The purpose of the new guidelines is to help LFIs better understand the risks associated with AML/CFT and to effectively implement their legal obligations in this regard. The guidelines align with the standards set by the Financial Action Task Force (FATF) and will go into effect within a month, CBUAE said in a statement on Wednesday.
The new guidelines discusses the potential risks involved in dealing with virtual assets (VA) and virtual asset service providers (VASP). The guidelines provide clear definitions of VAs, VASPs, and the business models they operate. They also outline the various channels and mechanisms through which LFIs interact with VASPs.
Additionally, the guidelines also outlines the customer due diligence (CDD) and enhanced due diligence (EDD) procedures that LFIs should follow when dealing with potential VASP customers and counterparties. The aim is to minimize risks by providing support through training programs, implementing a robust governance system, and establishing mechanisms for record-keeping.
“The new guidance related to the virtual assets sector contribute to strengthening the supervisory and regulatory frameworks of the Central Bank to combat money laundering and the financing of terrorism,” said Khaled Mohamed Balama, Governor of the CBUAE. “We are constantly working to enhance efforts and strengthen the awareness of licensed financial institutions to prevent all kinds of financial crime activities, and reduce potential risks to protect the financial and monetary system and maintain its soundness and stability, in line with the Financial Action Task Force standards.”
