UAE Central Bank Imposes Financial Sanctions On Exchange House

The UAE Central Bank has imposed a financial sanction of AED 200 million (approximately $54.45 million) on an exchange house for significant violations of anti-money laundering (AML) regulations.

This enforcement action is in pursuant with Article 137 of the Decretal Federal Law No. (14) of 2018, simply demonstrates the ongoing commitment of the UAE to combating illegal financial activities and safeguarding the integrity of its financial system.

The Central Bank has cited “significant failures” regarding the AML framework of the exchange house that include shortcomings in combating the financing of terrorism and illegal organizations.

The regulator of the UAE has also imposed an AED 500,000 sanction on a branch manager and prohibited him from holding any position within any licensed financial institution in the UAE.

This step has reflected the strict stance of regulators regarding accountability at both organizational and individual levels.

The penalty follows comprehensive examinations that are conducted by the regulator and aimed at ensuring adherence to anti-money laundering AML and counter-terrorism financing (CTF) standards.

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Last year, the UAE announced the 2024-27 National Strategy to boost measures against illicit financial activities, with an emphasis on anti-money laundering, counterterrorism funding, and proliferation finance.

The strategy comprises 11 legislative and regulatory reform goals created by the National Committee’s General Secretariat following World Bank methodology and international standards.

The government has taken further significant legislative steps, including amendments to strengthen the AML framework in August 2024, which simply targets anti-money laundering, terrorism financing, and illegal organizations.

As per the official press release of the UAE, this recent enforcement action by the UAE Central Bank shows the constant commitment of the UAE to maintain a financial regulatory environment.