5 August 2022, 15:50
5 August 2022, 15:50
Many of our local clients have asked us, what’s the impact on their organization considering the latest CBUAE Guide on Risk relating to payments and how we at DX Compliance can help.
The purpose of the Guide is to assist the understanding and effective performance by the United Arab Emirates Central Bank’s (“CBUAE”) Licensed Financial Institutions (“LFIs”) of their statutory obligations under the legal and regulatory framework in force in the UAE.
The Guidance sets out the expectations of the CBUAE for LFIs to be able to demonstrate compliance with these requirements.
1. Where can you find the guide:
Guidance for Licensed Financial Institutions on the Risks Relating to Payments
2. What does it mean for your organization?
The purpose of the Guide is to sets out the expectations of the CBUAE for LFIs to be able to demonstrate compliance with the in the report mentioned requirements.
Transaction Monitoring and SAR Reporting (Suspicious Transaction Reporting) Under Article 16 of the AML-CFT Decision, LFIs must monitor activity by all customers to identify behaviour that is potentially suspicious.
When monitoring and evaluating transactions, the LFI should take into account all information that it has collected as part of CDD. Traditionally using data smart has been a problem for may organizations. Data was and is in Silos instead of a single Platform.
Please share as a quote: “In all cases, the appropriate type and degree of monitoring should appropriately match the ML/FT risks of the institution’s customers, products/services and geographic exposure.”
The CBUAE has already release a guide for Licensed Financial Institutions on Transaction Monitoring and Sanctions Screening that we recommend reading.
And of course if a Transaction is identified with a behaviour that is potentially suspicious as required by Article 15 of the AML-CFT Law and Article 17 of the AML-CFT Decision, LFIs must file a STR/ SAR with the UAE FIU when they have reasonable grounds to suspect that a transaction, attempted transaction, or certain funds constitute, in whole or in part, regardless of the amount, the proceeds of crime, is related to a crime, or is intended to be used in a crime.
STR filing is not simply a legal obligation; it is a critical element of the UAE’s effort to combat financial crime and protect the integrity of its financial system.
By filing STRs with the UAE FIU, LFIs alert law enforcement authorities about suspicious behaviour and allow investigators to piece together transactions occurring across multiple LFIs.
In the case of extended, intermediated transaction chains such as those frequently seen in the Payment Sector, each LFI involved is ultimately responsible for monitoring all transactions processed or conducted through the LFI, using the information available to it.
Although LFIs cannot outsource their responsibility to report suspicious activity, they can outsource certain aspects of transaction monitoring.
In the prepaid card scheme for example, the bank that offers the prepaid cards may outsource automated transaction monitoring to the program manager, which has more direct insight into individual transactions.
The bank in this situation, and any LFI that outsources any elements of transaction monitoring, nevertheless retains ultimate responsibility for identifying and reporting suspicious transactions.
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