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The Central Bank of the UAE (CBUAE) has imposed financial sanctions worth a total of 350,000 dirhams ($95,302) on six Hawala providers operating locally.
They failed to register on time with the banking authority’s GoAML reporting system, which has been set up to combat money laundering, terrorism financing and other illegal activities.
The registration is a requirement under article 14 of the Federal Decree Law No 20 of 2018, as per instructions from the bank.
As a consequence, the bank fined the violators 50,000 dirhams each, with one provider receiving a double fine due to a previous violation of a similar nature.
“The CBUAE allowed ample time for all registered Hawala providers operating in the UAE to register on the GoAML system, who were informed that further delays would result in penalties under the AML/CFT Law,” the bank said.
CBUAE said it works to ensure all Hawala providers abide by UAE laws and CBUAE regulations and standards, to safeguard the transparency and integrity of their transactions.
Hawala providers offer money transfers based on an ancient system, usually for cross-border transactions and based on individual trust.
Under Hawala, the payee pays the provider, who then pays the recipient from his own funds in the recipient’s country.
(Reporting by Imogen Lillywhite; editing by Cleofe Maceda)
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