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The Central Bank of the UAE has issued a new guidance on money laundering and combatting terrorism finance relating to politically exposed persons (PEPs) or those who hold a prominent public position or function.
The guidance will help licensed financial institutions (LFIs) understand the anti-money laundering (AML) and combatting finance of terrorism (CFT) risks relating to PEPS, the bank said.
Institutions must demonstrate compliance with the new requirements within one month.
PEPs and transactions relating to them may expose institutions to a heightened risk of money laundering, terrorism financing and other illicit finance, the central bank said, due to their ability to influence government policies, determine the outcome of public funding or procurement decisions or obtain access to public funds.
Institutions must therefore carry out specific mandatory due diligence measures on PEPs, their direct family members or close associates, in addition to standard customer due diligence, the banking authority said.
They must also develop risk-based policies to ensure they appropriately identify PEPs or related customers prior to the start of the business relationship, as well as conducting ongoing monitoring.
Financial institutions should also maintain transaction monitoring systems that are equipped to identify patterns of unusual or suspicious activity and report any behaviour linked to money laundering, financing of terrorism or a criminal offence to the UAE’s Financial Intelligence Unit using the “goAML” portal, the announcement concluded.
(Reporting by Imogen Lillywhite; editing by Cleofe Maceda)
