News

UAE central bank issues AML guidelines for hawala transactions

Money launderingThe UAE’s Central Bank (CBUAE) has issued new regulations to limit the potential for money laundering in hawala transactions, a traditional practice of money transfers that uses non-bank settlement methods. The rules are designed to help registered hawala providers (RHPs) and licensed financial institutions meet their statutory anti-money laundering and counter terrorist-financing obligations. They will also bring UAE rules into line with global standards, as issued by the Financial Action Task Force. Hawala has long been used as a method for transferring money in areas where there are large parts of the population that are unbanked and is essentially based on trust rather than traditional bank-based settlement processes. However, it has become a method for laundering money, according to the CBUAE, which does not intend to outlaw the practice but will seek more accountability and record-keeping from the registered providers of such services. “The CBUAE will continue to keep a suitably close eye on licensed financial institutions in the country, including registered hawala providers to enhance their effectiveness in implementing AML/CFT measures to safeguard the UAE’s financial system,” said central bank governor Khaled Mohamed Balama. ©2021 funds global mena

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