The Central Bank of the UAE (CBUAE) issued a new guidance on transaction monitoring and sanctions screening for its licensed financial institutions. The guidance says that LFIs are obliged to develop internal policies, controls, and procedures that are commensurate with the nature and size of their business that are approved by their senior management, to enable them to manage their identified money laundering and financing of terrorism risks. LFIs must also put in place indicators to identify suspicious transactions and activities to file report it to the UAE’s Financial Intelligence Unit. LFIs are obliged to regularly screen their databases and 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 or entering a business relationship with any client, whether it is an individual or corporate. As stipulated in the guidance, LFIs 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. LFIs should also 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 guidance aims to promote the effective implementation by LFIs of their statutory anti-money laundering and combatting the financing of terrorism (AML/CFT) obligations. The UAE published a list of 38 individuals and 15 entities on its approved list of persons and organizations supporting terrorism (Local Terrorist List). A resolution by the UAE Cabinet demanded that regulatory authorities monitor and identify any individuals or entities affiliated with or associated with any financial, commercial, or technical relationship with the individuals or entities on the list. It also said that once identified, necessary action under the prevailing laws of the country, must be taken in under 24 hours.