The Central Bank and United Arab Emirates (UAE) Government, considers it extremely important that monies earned by illegal means abroad are not circulated in the financial system of the country for the benefit of the criminals. To combat with it terrorism Central Bank has issued circular no. 24/2000 including other amendment resolution issued from time to time, which reflect the recommendations relating to stopping the financing of terrorism issued by the Financial Task Force (FATF) established by the countries of the Group of Seven.
Money Laundering:
It refers to a transaction aimed at concealing and / or changing the identity of illegally obtained money, so that it appears to have originated from legitimate source, where in fact it has not. Also, it includes monies destined to finance terrorism or criminal acts.
Recent Amendment:
On 14 December 2016 resolution was passed by the central Bank amending the circular no. 24/2000 to include mandatory physical checking of the identity documents.
Bank Account and for investment in other financial institution requirement as provided by the central bank is as follows consequent to the said amendment:
- All information and necessary documents like full name of the account holder, the current address and place of work
- Physically checking of the UAE ID Card or the passport in case of a natural person and or Physical verification of the Trade License in case of a legal person, as applicable and keeping copies thereof initialled by the account opening officer under a true copy of the original signed off.
- Also, in relation to legal person to obtain an incorporation certificate, renewal licenses and details of all the details of all the shareholders holding more than 5% of the public shareholding companies.
- the cooperative societies or charitable or social or professional societies the Bank cannot open a bank account except where the original certificate is submitted signed by H.E. Ministry of Social Affairs.
- All changes in the information provided during the Account opening process need to be regularly updated.
- It is strictly prohibited to open accounts with assumed name or numbers.
Reporting of Unusual Transactions:
The central bank has mandated to inform all the unusual and suspicious transactions aiming at Money laundering to the Central Bank in the prescribed form – by all the Banks, moneychangers and financial institutions, including their Board Members, Managers and employees personally.
Further, the compliance officer of the concerned financial institution is responsible for contacting the central bank to report the money laundering, reporting unusual transactions, sending reports and maintain the reports properly in relation to the same.
Period of Keeping Documents, Records and Files:
To the Bank and institutions to which the circular apply are required to keep the records and make it available to the Central Bank Examiners for investigation for a minimum of 5 years. Including the Bank account opening documents which should be maintained for 5 years after closing of the Accounts.
Training:
The central Bank as via the said circular made the law strictly and stopped the Banks from applying their internal procedures for the aforesaid subject in relation to identification. Further Compliance Officer in each Bank, Money changer or any financial institution is entrusted with the responsibility of providing training to the staff responsible for receiving cash or overseeing the accounts and related reports for money laundering and holding workshops from time to time for the same.
Also, the penalty in accordance with prevailing laws and regulations has been provided in case Bank fails to report the unusual transactions and where the central Bank becomes aware after verification of Money laundering activities.
As the Banking and financial business is evolving in terms of electronic connection so are the sophistication of Banking Methods to evade money laundering.
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