UAE: Central Bank Issues Guidance for Licensed Financial Institutions on Politically Exposed Persons Risks
The UAE’s Central Bank has issued new guidance for Licensed Financial Institutions on Politically Exposed Persons risks.
The guidance will help these institutions understand risks, effectively implement their statutory anti-money laundering and terrorist financing obligations, and take Financial Action Task Force standards into account.
Under the guidance, Licensed Financial Institutions must demonstrate they have complied with its requirements within one month.
Customers who are Politically Exposed Persons and transactions involving these Persons may expose these Institutions to an increased risk of money laundering, terrorist financing and other illicit finance.
These Institutions must carry out specific mandatory due diligence measures on these Persons and their direct family members or close associates, as well as the standard customer due diligence required for all customers.
Institutions providing services to these Persons must develop risk-based policies to ensure they appropriately identify these Persons or related customers before starting the business relationship and risk rating and applying commensurate customer due diligence measures.
They must also conduct ongoing monitoring of the business relationships. In addition, they should maintain transaction monitoring systems equipped to identify unusual or suspicious activity patterns and report any behaviour linked to money laundering, terrorist financing or another criminal offence to the UAE’s Financial Intelligence Unit via the goAML portal.
They should integrate these preventive measures into their anti-money laundering and terrorist financing compliance programme and support it with appropriate governance and training.
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