UAE committed to bolstering VA regulatory framework: Al Zaabi

Workshop presents the draft supervisory money laundering/terrorist financing methodology


Issac John

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Published: Sun 10 Dec 2023, 4:53 PM

Last updated: Sun 10 Dec 2023, 4:55 PM

The UAE will continue to raise the effectiveness of its regulatory framework for virtual assets (VA) and virtual asset service providers (VASPs), a top ranking official of the country’s anti-money laundering and counter terrorism financing department said.

Hamid Al Zaabi, director-general of the UAE Executive Office of Anti-Money Laundering and Counter Terrorism Financing (EO AMLCTF), said the country is committed to developing a strong virtual asset regulatory framework to attract innovative firms and keep out illicit actors seeking to exploit the global financial system.

His remarks came as the International Monetary Fund (staff, in collaboration with the EO AMLCTF, recently held a "Fintech Roundtable" with Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) supervisors from the global community in Abu Dhabi..

"The UAE continues to raise the effectiveness of its regulatory framework for VAs and VASPs to attract innovative firms and keep out illicit actors seeking to exploit the global financial system. We are delighted to partner with the IMF team to give supervisory authorities across the world the opportunity to strengthen international cooperation and be part of the design process of an important new methodology for VA/VASP supervision," said Al Zaabi.

The event was attended by participants from 15 countries and organisations, including Australia, the Bahamas, Bahrain, the Cayman Islands, Denmark, Estonia, Finland, France, Japan, Kenya, Namibia, Saudi Arabia, the United Kingdom, the UAE, and the United Nations Office on Drugs and Crime.

The three-day workshop was convened to present the draft supervisory money laundering/terrorist financing (methodology for the risk-based supervision of VA and VASPs), developed by IMF staff as part of their capacity development programme.

Chady El Khoury, deputy-division chief of the Financial Integrity Group within the Legal Department at the IMF, said there was a broad consensus among participants on the need for urgent actions to mitigate the potentially significant ML/TF risks emerging from VA and VASPs.

"It is critically important that countries carry out robust AML/CFT risk-based supervision of VASPs, and that assessing the associated ML/TF risks is the starting point of an effective AML/CFT supervisory regime," said El Khoury.

The wide global representation at this workshop has given participants a chance to exchange knowledge on the ML/TF risks and challenges facing other jurisdictions, including access to accurate data and cross-border ML/TF risks.

Participants at the workshop identified a range of issues, including a lack of capacity and resources for supervisory agencies and data collection/analysis gaps. They agreed on the need for strong collaboration among AML/CFT supervisory agencies and upgrading existing ML/TF supervisory risk assessment models to accurately assess VA and VASPs.

Participants agreed that the majority of solutions lie in the design of the methodology, which can require a rethink of traditional approaches used for other sectors. In addition, the methodology needs to be flexible to fit different countries' needs and contexts.

The UAE has completed a comprehensive review of AML/CFT progress made in the first half of 2023 which shows significant improvement across the board.

In a statement recently, Al Zaabi stressed that the review's outcome demonstrates the robustness, responsiveness and effectiveness of the UAE national AML/CFT system. During this period, the UAE has continued to implement the National Action Plan and National AML/CTF Strategy and is resolutely pursuing its agenda for combating illicit financing and preserving the integrity of the global financial system. The UAE could successfully confiscate over Dh1.309 billion from March 2023 to mid-July 2023.

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