The Central Bank of the UAE (CBUAE) has recently released updated guidance on anti-money laundering and combatting the financing of terrorism (AML/CFT) for Licensed Financial Institutions (LFIs).
The guidance aims to enhance the understanding of risks and promote effective implementation of AML/CFT obligations among LFIs, including banks, finance companies, exchange houses, payment service providers, registered hawala providers, insurance companies, agents, and brokers.
This new guidance, aligned with the standards set by the Financial Action Task Force (FATF), will come into effect within one month.
A significant focus of the guidance is on addressing the risks associated with virtual assets (VA) and virtual asset service providers (VASP).
It provides clear descriptions of VAs, VASPs, and VASP business models, enabling LFIs to have a better understanding of the nature of these assets and providers.
The guidance also outlines the channels and mechanisms of interaction between LFIs and VASPs, facilitating a comprehensive approach to risk management in this evolving sector.
Khaled Mohamed Balama, Governor of the CBUAE, said, “The new guidance related to the virtual assets sector contributes to strengthening the supervisory and regulatory frameworks of the Central Bank to combat money laundering and the financing of terrorism. We are constantly working to enhance efforts and strengthen the awareness of licensed financial institutions to prevent all kinds of financial crime activities and reduce potential risks to protect the financial and monetary system and maintain its soundness and stability, in line with the Financial Action Task Force standards.”
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