The Central Bank of the United Arab Emirates (CBUAE) has taken strong action against a money exchange company. This company was found to be breaking important rules that help stop money laundering and the funding of illegal activities. Because of these serious mistakes, the Central Bank has fined the exchange house Dh3.5 million.
This action is part of a law called Federal Decree Law No. (20) of 2018, which is all about stopping criminals from using banks and exchange companies to hide or move illegal money. The law also makes sure that no one can use the financial system to support terrorism or other dangerous activities. The exchange house broke these rules, and as a result, the Central Bank decided to punish them with a large financial penalty.
The Central Bank did not name the exchange house in its official statement. However, it made it clear that the exchange house had failed to follow the required steps that are meant to protect the country’s financial system from illegal use. These steps are known as AML/CFT measures — short for Anti-Money Laundering and Combating the Financing of Terrorism.
Why the Fine Was Imposed
Before giving the fine, the Central Bank carried out an in-depth check of the exchange house. This kind of check is called an examination, where experts from the Central Bank look closely at how the company works, what steps it takes to stop crime, and whether it follows the rules.
After finishing the examination, the Central Bank found several big problems. The exchange house did not have proper systems and checks in place to stop bad people from using its services for illegal money activities. It also did not follow important rules that all financial companies in the UAE must stick to.
Because these failures were serious, the Central Bank used its power under Article 14 of the AML law to issue a penalty. This article gives the Central Bank the right to fine any financial company that breaks the rules.
In its official message, the Central Bank said it is working hard to make sure that all exchange houses in the country are doing their job properly. It also made it clear that not just the companies but also their owners and staff must follow all rules and laws. This helps keep financial transactions in the country honest and safe.
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A Pattern of Action by the CBUAE
This is not the first time the Central Bank has punished an exchange house. In fact, just last week, it gave out an even bigger fine — Dh100 million — to another exchange company that also failed to follow AML/CFT rules. That shows how serious the Central Bank is about protecting the country’s financial system.
The Central Bank carries out regular examinations and reviews of all financial institutions in the UAE. These include banks, exchange houses, and other money-related businesses. The goal is to make sure everyone is playing by the rules and no one is putting the financial safety of the country at risk.
By finding companies that are not following the law and giving out heavy fines, the Central Bank is sending a clear message: No mistakes will be taken lightly when it comes to money laundering or the financing of terrorism.
This recent fine of Dh3.5 million is another step in the Central Bank’s ongoing effort to make the UAE’s financial system one of the safest and most trusted in the world. The rules exist to protect people and businesses from being tricked or harmed by illegal money activity. And the Central Bank is working hard to make sure these rules are followed by all.
