CBUAE issues anti-money laundering guidelines related to ‘politically exposed persons’

The Central Bank of the UAE (CBUAE) has issued further guidelines on anti-money laundering and combatting the financing of terrorism (AML/CFT) for its licensed financial institutions (LFIs). This set of guidelines covers risks related to politically exposed persons (PEPs).

According to the state news agency, WAM, the guidelines take Financial Action Task Force (FATF) standards into account and require LFIs to comply with its requirements within one month.

According to the CBUAE, customers that are PEPs and transactions involving PEPs may expose LFIs to a heightened risk of money laundering, terrorism financing and other illicit finance.

The guidelines state that licensed financial institutions must carry out specific mandatory due diligence measures on PEPs and their direct family members or close associates in addition to the standard customer due diligence required for all customers.

Institutions providing services to PEPs must develop risk-based policies to ensure they appropriately identify PEPs or related customers prior to the commencement of the business relationship and risk rating and applying commensurate customer due diligence measures.

The CBUAE guidelines state that institutions must also conduct ongoing monitoring of the business relationships. In addition, LFIs should maintain transaction monitoring systems equipped to identify patterns of unusual or suspicious activity and report any behaviour linked to money laundering, financing of terrorism or a criminal offence to the UAE’s Financial Intelligence Unit using the “goAML” portal.

These preventive measures should be integrated into an LFI’s AML/CFT compliance programme and supported with appropriate governance and training.

Khaled Mohamed Balama, governor of the CBUAE, said, “We are keen to ensure that all LFIs comprehensively understand their role and responsibilities in mitigating relevant AML/CFT risks and safeguarding the UAE financial system from illicit activities. This guidance provides LFIs with further requirements and measures they must fulfil before and after initiating business relationships with politically exposed persons to stay anti-money laundering compliant.”

He added, “We will continue our efforts to issue similar regulatory guidelines, to enhance the efficiency and robustness of our financial system in line with international standards related to anti-money laundering and the financing of terrorism.”

In recent news, CBUAE issued new guidance on AML/CFT for LFIs on the risks related to payments, and the preventive measures that LFIs should apply in order to mitigate such risks. The guidelines came into effect on August 1.

Read: Central Bank of UAE issues new guidelines on anti-money laundering