Search Icon Search Icon Menu Icon Menu Icon

5 October 2021, 10:22

Tagline

CBUAE releases new guidelines for licensed financial institutions on transaction monitoring and sanctions screening

Introduction

New guidelines have been issued by the Central Bank of the United Arab Emirates (CBUAE) about AML transaction monitoring procedures and screening sanctions for its license financial institutions (LFIs). Throughout the guide, LFIs are encouraged to understand and effectively comply with their statutory AML/CFT responsibilities.

On September 13 2021, the CBUAE compliance requirements for LFI came into effect and it is now required for LFIs to demonstrate compliance within one month of the effective date.




Transaction Monitoring

Transaction monitoring in banks and other financial firms are required to follow the guide by the Central Bank of the United Arab Emirates (CBUAE). As a result of a successful transaction monitoring program, LFIs are able to identify aml transaction monitoring red flags, investigate those cases, and report suspicious transactions, adhering to the legal and regulatory framework in the UAE, and ensuring that their customers and transactions are within their risk appetites. 

The effectiveness of transaction monitoring is directly related to obtaining information about the types of transactions in which the customer normally engages, including, but not limited to customer due diligence (CDD) and know your customer (KYC) measures. 

A Transaction Monitoring program should include the following elements: 

1- A well-calibrated risk-based framework
2- ​​Robust training and risk awareness
3- Meaningful integration into the AML/CFT program
4- Active oversight




Sanction Screening

In accordance with the guidelines, LFIs must establish and maintain an effective transaction monitoring and sanction screening program, including a well-calibrated risk-based framework, active board supervision, and employee training and awareness. Additionally, LFI should ensure that its systems for monitoring transactions and screening sanctions are continuously improved according to its risks. Independent testing, verification, and auditing of the system, as well as the monitoring and screening models, should take place.




Programme Governance and Oversight

To keep money laundering and terrorist financing risks under control, LFIs are required to formulate internal policies, procedures, and control measures suited to its nature and scale. These must be approved by the senior management team. Besides developing indicators to detect suspicious transactions and activities, LFIs are responsible for reporting them to the UAE Financial Intelligence Unit.

Furthermore, before any transaction or entry is made, LFIs are required to regularly review its database and transactions based on names published in lists by the UN Security Council and its affiliated bodies (UN Consolidated List) and the UAE Cabinet (UAE List of Local Terrorists). A customer can be established as a client, whether it is a single individual or a business.

This guide is for licensed financial institutions to ensure their compliance. The key reference point required by AML/CFT.

Khaled Mohamed Balama, President of CBUAE



Conclusion

Software programmes, such as the one created by DX Compliance, uses the most effective technology to irradiate human error within AML. An effective transaction monitoring program enables LFIs to detect, investigate and report suspicious transactions. The solution is designed and structured based on the CBUAE guide to ensure the highest levels of security for LFIs and their customers. 

Read more about the Central Bank Guideance here.

To learn more about our product and how we can help your company, book a demo today.

 


Signing up gives you exclusive access to essential industry insights, don’t miss out!

15.10.2021   

Money Laundering in the Art World

The introduction of 6AMLD regulations aims to reduce financial crimes.

Get access

27.07.2021    AML Compliance

PEP Screening and Sanctions – AML & CTF

Uncovering the PEP and Sanctions Lists and Global Regulation

Get access

26.04.2021    AML Compliance

RegTech The New FinTech

How Fintech has set the foundation and facilitated the growth of Regtech.

Get access

Keep yourself up-to-date

By clicking the Button you confirming that you’re
agree with our following Terms and Conditions