Taking a strong stance against money laundering, the Central Bank of the UAE (CBUAE) has issued a new guidance on transaction monitoring and sanctions screening for its licensed financial institutions (LFIs) that aims to promote anti-money laundering.
The guidance serves as a key point of reference for licensed financial institutions to ensure their compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) requirements, the central bank said in a statement on Monday.
The guidance, which comes into effect today, requires LFIs to demonstrate compliance with CBUAE’s requirements within one month.
Per the guidance, LFIs must put in place indicators to identify suspicious transactions and activities in order to file suspicious transaction and activity reports to the UAE’s Financial Intelligence Unit.
In addition, LFIs are required to regularly screen their transactions against names on lists issued by the United Nations Security Council and its relevant Committees (UN Consolidated List) or by the UAE Cabinet (UAE Local Terrorist List) before conducting any transaction with any client, whether it is individual or corporate.
They should establish and maintain effective transaction monitoring and sanction screening programs consisting of a well-calibrated risk-based framework, training and awareness of their employees and active oversight by their board.
In addition, LFIs should ensure the ongoing enhancement of their transaction monitoring and sanctions screening systems based on their risks. The systems, including the relating monitoring and screening models used should be subject to independent testing, validation, and auditing, the bank said.