Financial Crime World

UAE’s Comprehensive Risk-Based Approach to Implementing CRS Compliance Programme

The United Arab Emirates (UAE) has taken significant steps towards ensuring effective implementation of its Compliance Programme Guide for the Common Reporting Standard (CRS). The programme consists of nine critical components, including data validation, risk monitoring and assessment processes, audit procedures, enforcement measures, and mechanisms to identify potential circumvention.

Background

According to Article 2 of Federal Decree No. 48 of 2018 Ratifying the Multilateral Administrative Agreement for the Automatic Exchange of Financial Information, the UAE Ministry of Finance has been granted powers to take necessary measures to implement the provision of the decree in the country.

Implementing CRS Compliance Programme

The Central Bank of the United Arab Emirates (CBUAE), as the regulatory authority responsible for implementing the CRS compliance programme, has taken a proactive approach to ensure its effective implementation. The bank conducts thematic reviews and outreach activities to raise awareness among supervised sectors about the importance of AML/CTF compliance.

Outreach Efforts

  • The CBUAE has conducted several outreach events and presentations on AML/CTF guidance for various sectors, including:
    • Licensed exchange houses
    • Low-risk financial institutions (LFIs)
    • Registered hawala providers
    • Real estate and precious metals/stones sectors
  • The bank has also participated in forums to discuss issues and challenges facing the banking industry related to AML/CTF.

Domestic and International Cooperation

  • The UAE’s National Anti-Money Laundering/Countering Financing of Terrorism Committee (NAMLCFTC) has revised the country’s national strategy to address money laundering and terrorism financing risks identified in the Mutual Evaluation Report (MER).
  • The CBUAE contributed significantly to the development of the enhanced national action plan, which outlines a series of initiatives and actions to implement the MER’s recommendations.

Enforcement

  • The CBUAE requires all LFIs to comply with UAE Decree Federal Law and Executive Regulations, as well as any CBUAE regulations and directions.
  • The bank has imposed financial sanctions on several institutions and individuals for non-compliance with AML/CTF regulations.
  • The outcome of administrative and financial sanctions, including penalties imposed as a result of enforcement action, is published by the CBUAE.

Conclusion

The UAE’s comprehensive risk-based approach to implementing its CRS compliance programme demonstrates its commitment to ensuring the integrity of the country’s financial sector. By adopting a proactive and collaborative approach to AML/CTF compliance, the UAE is sending a strong message that it will not tolerate non-compliance with international standards.