Register hawala business by Dec 2 or face the law

The UAE Central Bank will start taking legal actions against the non-registered service providers in hawala business when registration deadline expires on December 2, 2020 and no hawala service provider will be allowed to operate in the country without a registeration.

“After the expiry of deadline, the central bank will impose the necessary legal and supervisory measures available in the law. This includes imprisonment and fine, in addition to administrative penalties which may include closure of the operating premises,” the central bank said in a statement to Khaleej Times.

Hawala, also known as hundi, is a process whereby money value is transferred to individuals in other countries, and is usually used in the remote places of those countries, which do not have access to banking services.

Regularising hawala is an important element in the central bank’s continuous efforts to maintain transparency of fund transfer transactions, and enhance the reporting systems as per the international standards, especially with regards to Anti-Money Laundering and Combating Terrorist Financing (AML/CFT).

As per provisions of circular No. 24/2019 issued by the central bank, registration is mandatory for hawala service providers, or informal money transfer service providers operating in the UAE, to regularise their status before December 2, 2020.

Regularising hawala operators will bring transparency in transfer of funds and also the reporting systems as per the international standards, especially with regards to AML/CFT.

Two penalties

Under the central bank regulations, a hawala provider faces penalty in two cases.

Firstly, if it fails to register by December 2, 2020, and secondly, if it, as a registered service provider, failed to comply with the requirements of the ‘registered hawala providers regulation’. Penalties for failure to register include fines and imprisonment.

The central bank monitors the concerned companies as well as audits their accounts because the registered hawala provider regulations and the central bank law confer powers to the competent departments at the apex bank to inspect and examine all areas of the business of hawala.

How to register

Hawala providers are required to fill out and send the required documents available on the central bank website to licensing@cbuae.gov.ae to meet the necessary criteria regarding the registration process.

The document “acknowledgment and certification of hawala providers for re-registration with the Central Bank of the UAE as registered hawala providers’ includes connecting to the central bank’s goAML system, which all hawala providers must complete prior to obtaining a final registration certificate from the central bank.

In addition, hawala providers are obligated to comply with the requirements specified in Articles (4) and (5) of the regulations as well as the laws and regulations related to combating money laundering and financing of terrorism and illegal organisations in the UAE.

Anti-money laundering ACTION plan is ready

The Ministry of Economy has announced the development of a strategic plan and initiatives within the framework of its role in supporting the efforts to combat money laundering practices in the country.

Abdulla bin Touq Al Marri, UAE Minister of Economy, said that the UAE has succeeded in establishing an integrated legislative system capable of driving economic and social development. The country has also been keen to implement highly efficient development policies in accordance with its principles of knowledge, innovation, transparency and sound business practices and economic stability.

Abdullah bin Ahmed Al Saleh, undersecretary of the Ministry of Economy, said that the ministry is eager to develop its efforts and contribute to supporting the UAE’s anti-money laundering efforts to enhance the country’s technical commitment to international recommendations and treaties in this field and raise its performance across relevant global indicators. — waheedabbas@khaleejtimes.com