29 Mar 2018
Money exchange houses in the United Arab Emirates have been ordered by the central bank to raise their standards, after several banks cut ties with them due to concerns about the risk of illicit financial flows.
The United Arab Emirates’ huge expatriate workforce and growing business and tourism sectors have made it a global centre for exchanging foreign currencies and transferring money to and from the Middle East, Asia, Africa and parts of Europe.
But some of the roughly 125 exchange houses in operation have struggled in recent years as a growing number of U.S. dollar correspondent banks, relied upon to clear dollar trade, and local lenders cut ties with them. The banks have often cited the prohibitive compliance costs they must have in place to ensure they’re not doing business with exchange houses laundering money or financing terror.
In an effort to improve the industry’s fortunes, the central bank earlier this month published a 150-page document laying out standards that exchange houses must comply with by January 2019 or risk fines and, in the most extreme case, having their licences revoked.
The rules include requiring exchange houses to appoint a compliance officer and to check and record the identification of the senders and receivers of all money transfers, said sources familiar with the matter. Currently, exchange houses are only required to do so on transactions of more than 2,000 dirhams ($545).
Money transfers between exchange houses in the UAE will also have to be made via the central bank’s electronic transfer system, rather than in cash, the sources said.
By Tom Arnold, 29 March 2018, Reuters.
Link here to the Reuters article.
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