The Central Bank of the UAE (CBUAE) has issued fresh anti-money laundering and counter-terrorist financing (AML/CFT) guidelines to Registered Hawala Providers

1. AML/CFT Fresh Guidance issued by
UAE Central Bank
The Central Bank of the UAE (CBUAE) has issued fresh anti-money
laundering and counter-terrorist financing (AML/CFT) guidelines to Registered
Hawala Providers (RHP) and licensed Financial Institutions (LFIs) that offer
services to RHP. The proposed guidance will help RHPs and LFIs understand
and effectively implement the statutory AML/CFT responsibilities set forth in
Federal Decree-Law No. (20) of 2018 on AML/CFT and Cabinet Decision No.
(10) of 2019. The Financial Action Task Force (FATF) rules and advice are
also taken into account in this guidance.
Hawala is an informal type of money transfer in which no tangible money is
exchanged. A money transfer without money movement is how it’s described.
Hawala is an alternate remittance route that operates outside of regular
banking institutions that is still utilized today. As a result, the UAE Central
Bank allows lawful hawala activity, which is seen as an important part of the
country’s ongoing efforts to increase financial inclusion and bring the
unbanked into the regulated financial system.
RHP must completely adhere to all UAE rules for targeted financial sanctions
and suspicious transaction reporting (STR). RHPs must also create and
maintain a robust AML/CFT compliance programme to prevent the activity
from being used to support money laundering or terrorist funding. A
competent compliance officer, adequate customer and agent due diligence,
transaction monitoring, and record keeping should all be incorporated.
Moreover, RHP must establish a settlement account with a UAE-based bank
and inform the CBUAE of the account’s details. CBUAE urges LFIs to accept
RHP clients and recommends that they implement adequate controls to
minimize any risk that may arise as a result of these transactions. LFIs must

2. not engage customers who are unregistered hawala providers situated in the
UAE, and they must disclose any STRs to the UAE’s Financial Intelligence
Unit, report them to the CBUAE when they are discovered, and constantly
monitor the connection.
Globally, as the regulatory framework changes and becomes more
demanding, financial institutions in the Gulf region, especially, are finding it
increasingly difficult to implement new regulations and build comprehensive
compliance systems. Nonetheless, in order to combat money laundering and
terrorist funding in the UAE, the government has implemented strict
restrictions on unlawful hawala transactions.
AML/CFT Fresh Guidance issued by
UAE Central Bank
Level 18, City Tower-2,
Sheikh Zayed Road
PO Box 32665
Dubai – United Arab Emirates. Tel: +971 4 327 7775
E-mail: dubai@hlbhamt.com
www.hlbhamt.com