UAE Central Bank Revokes License of Dirham Exchange for Anti-Money Laundering Misconduct

The licensing of Dirham Exchange, a UAE-based exchange house, has been revoked by the UAE Central Bank. In addition, their name has been removed from the official register. The regulatory authorities in the banking sector are taking strict actions against financial misconduct.

The UAE Central Bank has also taken the decision to revoke the registration of RMB Commercial Brokers, which was a provider of Hawala services.

On Wednesday, the UAE Central Bank announced that the administrative sanctions were imposed after going through an appeal procedure in accordance with the laws that govern the prevention of money laundering in UAE, financing of terrorism, and the financing of unlawful entities.

Following thorough examinations conducted by the Central Bank, the two companies were subjected to sanctions due to their involvement in severe regulatory misconduct. This misconduct encompassed instances of AML violations as well as collusion aimed at circumventing the central bank’s instructions to the exchange house, specifically regarding refraining from engaging in remittance transactions with certain countries.

The examination results indicated that the companies possessed a weak compliance framework, leading to their non-compliance with regulatory obligations and failure to report any regulatory breaches to the CBUAE.

The United Arab Emirates has made noteworthy strides in its efforts to combat money laundering, the financing of terrorism, and the proliferation of weapons. Recently, the UAE declared its intentions to create federal prosecution offices exclusively dedicated to economic crimes, including money laundering. According to the state news agency Wam, the establishment of these new offices is seen as an initial measure towards investigating and taking strict actions against money laundering and economic crimes. These offices will handle a range of matters including bankruptcy, corporate crimes, financial markets, regulation of competition, intellectual property (IP) and trademarks, as well as offenses related to customs evasion.

Since 2020, the UAE has extradited a total of 899 criminals, out of which 43 were implicated in money laundering. Notably, 10 of these individuals were either terrorists themselves or had financed terrorist activities.

As part of its campaign to combat terrorist financing and money laundering, the UAE has imposed fines exceeding 115 million dirhams (31.3 million US dollars) within this year’s first quarter.

The UAE’s Executive Office of AML and CFT collaborated with the World Bank in a workshop last month. The aim of the workshop was to enhance the framework addressing financial crimes. Throughout the workshop, UAE authorities deliberated, pinpointed, and assessed the risks associated with money laundering and terrorist financing, with the goal of formulating impactful mitigation strategies.