New rules for financial institutions to perform due diligence of real estate, precious metal firms

The UAE Central Bank on Tuesday has issued new guidelines for banks and financial institutions which provide services to companies in the real estate and precious metals and stones sectors.

These guidelines are aimed at mitigating the risks as well as effectively implementing anti-money laundering and combatting the financing of terrorism (AML/CFT) obligations.

Under the new guides, all licensed banks and financial institutions are required to perform appropriate customer due diligence and report any suspected behaviour linked to money laundering, financing of terrorism or a criminal offence by submitting suspicious activity reports directly to the UAE’s Financial Intelligence Unit using the “goAML” portal.

The regulator stressed that licensed financial institutions (LFIs) providing services to real estate and precious metals and stones sectors should specifically assess the associated money laundering and terrorist financing risks and develop an effective AML/CFT programme that encompasses a competent compliance officer and provides training for LFIs’ employees on said risks.

It is important to note that the UAE Ministry of Economy, which issues the relevant guidance, supervises real estate agents, brokers and dealers in precious metals and stones who are qualified as designated non-financial businesses and professions.

Earlier this month, Ahmed Ali Al Sayegh, Minister of State, and Khaled Mohamed Balama, governor of the Central Bank of the UAE, chaired a meeting which was attended by the CEOs of all onshore financial institutions in the UAE to highlight the UAE’s AML/CFT efforts, with an emphasis on the crucial role played by the private sector in strengthening the UAE’s AML/CFT system.

“A critical part of UAE Central Bank’s mandate is to ensure that all licensed financial institutions have a deep comprehension of their role in mitigating and addressing the risk of illicit activities in the UAE’s financial system. This guidance serves as a key point of reference for those providing services to real estate and precious metals and stones sectors and is set to further increase the efficacy of licensed financial institutions in contributing to the stringent national efforts in the field of AML/CFT,” said Khaled Mohamed Balama.

The newly-released guidance for real estate, precious metals and stones sectors also takes into account the standards and guidance issued by Financial Action Task Force (FATF).

— waheedabbas@khaleejtimes.com