UAE makes it mandatory for hawala service providers to register
03 Sep 2020

The UAE has made it mandatory for Hawala service providers in the country to register, as the country strengthens its anti-money laundering and counter terrorist financing (AML/CFT) framework, the Central Bank said in a statement on Monday.

The announcement was made following the sixth meeting of the National Committee for Combating Money Laundering and the Financing of Terrorism and Illegal Organisations (NAMLCFTC) in Abu Dhabi on Monday.

Hawala, or hundi, is an unofficial and informal channel to transfer money mainly used among South Asians whereby they give money to agents who then instruct their associates in the country to deliver it to the customer’s house. It is estimated that between $100 billion to $300 billion flow through this informal transfer system globally every year.

With UAE being a one of the major markets for remittances, regulating this informal industry will help monitor money-laundering and counter terror funding. Remittances from the UAE amounted to some Dh165 billion in 2019, led by India, Pakistan, the Philippines, Egypt, the UK, and Bangladesh.

Chaired by Abdulhamid M. Saeed Alahmadi, governor of the UAE Central Bank and chairman of the committee, the meeting also discussed technology assistance and capacity building both in terms of human and financial resources to further strengthen the country’s ability to implement targeted financial sanctions relating to the prevention and suppression of terrorist financing.

It also discussed proactive cooperation with countries that share commitment in implementing the strategy of combating money laundering and the financing of illegal organisations.

By Waheed Abbas, Khaleej Times, 1 September 2020

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