Compliance hot spots for third-party transactions and corporate remittances
08 Feb 2019

In recent years, the United Arab Emirates (UAE) has been looking to become more stringent regarding compliance, alongside its aims to encourage the establishment of an open economy to facilitate foreign investment.

However, there are some challenges regarding foreign investment and compliance.

One issue is the complexity to detect the money trail in cases of third-party corporate transactions.

For example, many orders processed in the UAE are from suppliers in jurisdictions like India, Pakistan, Kenya, Congo and Hong Kong.

Payment for goods from these Asian and African countries is usually sent to firms in China, Singapore, Malaysia, the United Kingdom and the Unites States.

This is part of the process of the importation of goods involving third-party transactions.

Outbound remittances through correspondents involved in third-party transactions have some serious challenges.

Let’s take a look at some of them:

Money trail

There is a need to establish controls about how money will be transferred through a third-party from a home country to the host country or final destination.

While there is a legitimate requirement of transparent sources of funds through a banking channel, sometimes an informal transaction may take place which makes them a challenge as they have no money trail and do not undergo proper regulatory supervision.

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One Response to “Compliance hot spots for third-party transactions and corporate remittances”
sohail akber

sohail akber February 23, 2019

The artical reflect, the authors excellent grip and understanding of the MSB industry in UAE. We hope and expect that you will unveil core AML/CFT issues that threatens the MSB industry. Correspondent and customer relationship and much more. (Sohail Akbar CRCMP CAMS Audit) CRO GCC Exchange.

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