The United Arab Emirates (UAE) central bank has issued new anti-money laundering (AML) and counter-terrorism financing (CTF) guidance for financial institutions that deal with virtual assets (VAs).
The guidance, which takes effect within one month, applies to banks, finance firms, exchange houses, payment service providers, licensed hawala providers, and insurance agencies and brokers.
The guidance addresses the risks that financial institutions may face when dealing with VAs, including the risk of money laundering and terrorist financing.
It requires financial institutions to conduct due diligence on their VA customers and counterparties, and to report suspicious activity to the authorities.
The UAE central bank said that the guidance is in line with the requirements of the Financial Action Task Force (FATF), an international body that sets standards for AML and CTF.
The UAE was placed on FATF’s “grey list” in March 2022, which means that it is subject to heightened scrutiny by the FATF. The UAE government has said that it is committed to working with FATF to address the concerns that led to the country’s placement on the grey list.
The issuance of the new AML and CTF guidance is a positive step by the UAE central bank. It shows that the UAE government is committed to addressing the risks of money laundering and terrorist financing in the VA sector. The guidance will help to ensure that financial institutions in the UAE are taking the necessary steps to prevent these crimes.
In addition to the new AML and CTF guidance, the UAE central bank has also taken other steps to regulate the VA sector.
In 2021, the central bank issued a regulatory framework for VA service providers. The framework requires VA service providers to be licensed by the central bank and to comply with certain AML and CTF requirements.
