The UAE Central Bank has recently released new guidelines. These guidelines actively aim to combat money laundering and counter-terrorism financing within the realm of virtual assets.
The guidelines specifically address the handling of cryptocurrencies and non-fungible tokens. They serve as a directive for financial institutions operating in the UAE, outlining the risks associated with engaging in virtual assets and virtual asset service providers.
Thorough Due Diligence Emphasised in UAE Central Bank New Guidelines
The guidelines placed emphasis on the importance of conducting thorough due diligence. Licensed financial institutions actively engage in combating money laundering and counter-terrorism financing when dealing with customers and counter parties involved in virtual asset transactions.
The objective is to ensure that appropriate measures are in place to mitigate the potential risks associated with such activities.
The implementation of the guidelines, applicable to various entities operating within the UAE’s financial sector, will take place within a month. This includes banks, finance companies, exchange houses, payment service providers. They even consist registered hawala providers, insurance companies, as well as agents and brokers.
UAE’s Placement on the FATF “Grey” List and Increased Monitoring
The UAE Central Bank’s initiative takes into consideration the standards set forth by the Financial Action Task Force (FATF). They are an international body that develops policies to combat money laundering and terrorism financing.
In March 2022, the UAE was placed on the FATF’s “grey” list. This signifies increased monitoring of its efforts in this area.
The UAE has expressed its commitment to working closely with the FATF, all for the purpose of enhancing its regulatory framework and ensure compliance with global standards.
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