Foreign Bank Faces Dhs5m Fine from UAE for Money Laundering Breaches

The Central Bank of the UAE (CBUAE) has imposed a $1.4m (Dhs5m) fine on a foreign bank for ‘violating Anti-Money Laundering (AML) regulations.’

The bank failed to follow Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) measures to strengthen financial security.

UAE Enforces AML Law Penalties

The “financial sanction on a bank” was implemented for not being aligned with specific guidelines highlighted in the two important UAE laws.

• Federal Decree Law No. (14) of 2018 mainly targets how the Central Bank of UAE operates and oversees financial organizations such as banks to ensure they follow all the required regulations.
• Federal Decree Law No. (20) of 2018 is associated with “Anti-money Laundering and Combating the Financing of Terrorism and Illegal Organizations.” This law decides the rules and regulations for banks to follow to prevent illicit activities.

Banks didn’t align their operations with these laws, which keeps the financial system secure and transparent.

UAE Strengthens AML Compliance for Banks

The central bank has not revealed the name of the bank involved.  The central bank has instructed the bank to inform ‘its board of directors’ about the regulator’s action.

• CBUAE, through its oversight and regulatory responsibilities, ensures compliance with AML laws.
• All the banks, their employees, and their shareholders must comply with UAE’s AML laws and regulations.
• The regulations are aligned with international standards to improve transparency.
• The goal is to protect the integrity of the country’s banking sector and financial systems.

These steps show the country’s commitment to regulatory bodies and enforcement agencies to protect the financial ecosystem.

Dhs 5.8M Penalty for AML Failures

A local bank was penalized Dhs5.8m by CBUAE in August. The penalty was given because the bank had not taken proper steps to prevent illicit financial activities such as money laundering and the financing of terrorism.

UAE, a hub for Abu Dhabi’s “Global Market and Dubai International Financial Centre,” was removed from the Financial Action Task Force (FATF)’s “grey list” in February as it has improved its AML/CFT compliance.

Read Also:

• Swedbank’s Ex-CEO Bonnesen Sentenced to 15 Months for Misleading AML Statements
• Two Bankers Face Charges in Singapore’s $2.3 Billion Money-Laundering Case
• Legal Firm in UK hit with £22k fine for AML breaches

UAE Exits FATF Grey List with AML Reforms

In order to be removed from the FATF grey list, the UAE implemented several significant changes. These reforms included

• Increasing investigations of illicit activities
• Improved legal actions against financial crimes
• Enhancing cooperation with other countries
• Updating rules for virtual assets (like cryptocurrencies) to match international standards

These reforms helped strengthen the country’s fight against illegal financial activities and led the country to exit from the FATF’s grey list, as highlighted by the Central Bank of the UAE. This achievement demonstrates the UAE’s ongoing commitment to improving financial oversight and AML compliance.

Secure Business with Strong AML Compliance

AML violations can lead to financial penalties, which damage the organization’s trust. As financial crimes increase, the focus on their prevention and detection also increases.