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Friday 10 May 2024


Friday 10 May 2024

Central Bank of the UAE and Bank Indonesia sign MoU to promote the use of local currencies for bilateral transactions

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AML/CFT Supervision

The Central Bank of the UAE established a dedicated Department in August 2020 to handle all Anti-Money Laundering and Combatting the Financing of Terrorism matters (AML/CFT) which the Banking Supervision Department handled previously.

The Anti-Money Laundering and Combatting the Financing of Terrorism Supervision Department (AMLD) serves three key objectives:

 

• Examining Licensed Financial Institutions (LFIs),

• Ensuring adherence to the UAE’s AML/CFT legal and regulatory framework, and

• Identifying relevant threats, vulnerabilities and emerging risks concerning the UAE's financial sector.

 

Through AMLD, the CBUAE coordinates closely with the UAE’s National AML/CFT Committee to effectively implement the National Action Plan.

 

Within the CBUAE, the AMLD coordinates with the Examination Division of the Banking Supervision Department to exchange AML/CFT information on LFIs, and also works closely with the Enforcement Division to impose penalties required as outlined within the CBUAE’s legal, regulatory and enforcement framework.

 

Externally, the AMLD acts as the interface between the CBUAE and domestic stakeholders with a focus on facilitating cooperation to enhance the compliance of LFIs with AML/CFT requirements, often alongside the UAE's supervisory, regulatory and law enforcement authorities and the UAE Financial Intelligence Unit (FIU). The AMLD also collaborates with international stakeholders to exchange information on best practices concerning conducting AML/CFT processes and with foreign supervisors to handle requests for information on AML/CFT cases and perform joint AML/CFT examinations.

 

The distinct mandates divisions within the AMLD

Compliance and Examination:

Devises the annual AML/CFT risk-based supervisory plan, conducts supervisory examinations and issues corrective actions to LFIs. It also recommends sanctions and disciplinary measures in addressing cases of non-adherence by LFIs.

Policy and Cooperation:

Prepares policies and guidance for supervised LFIs, performs outreach activities, handles requests for information from local and international regulators, manages coordination with national committees and other authorities, and liaises with domestic and international stakeholders.

Research and Risk Analysis:

Collects AML/CFT-related data points from LFIs and other stakeholders, performs institutional and sectoral risk assessments, and creates dashboards of risk analysis to identify areas of vulnerability in LFIs for input into the compliance and examination plans compiled by the CBUAE.

UAE Decree Federal Law and Executive Regulation

Federal Decree No. (20) of 2018 is a fundamental pillar of the UAE’s AML/CFT efforts. This Decree stipulated the establishment of:


- a committee dedicated to AML/CFT objectives, under the chairmanship of the Governor of the CBUAE.
- an independent Financial Intelligence Unit (FIU) to receive and investigate all reports submitted by financial institutions and other corporate establishments regarding suspected illicit financial activity.

 

As implemented by Cabinet Decision No. (10) of 2019, Federal Decree No. (20) of 2018 as amended by Federal Decree Law No (26) of 2021, has raised the effectiveness of the legal and institutional framework of the nation in the field of AML/CFT, in line with the requirements and recommendations of the Financial Action Task Force (FATF).

Federal Decree Law No (20) Of 2018 On Anti Money Laundering And Combatting The Financing Of Terrorism And Financing Of Illegal Organisations

Federal Decree Law No (26) Of 2021 Amending Certain Provisions Of Federal Decree Law No. (20) For 2018 On Anti-Money Laundering And Combating The Financing Of Terrorism And Financing Of Illegal Organisations