Money laundering is a major problem for financial institutions worldwide. Despite efforts at deterrence, cases of money laundering continue to climb, causing great risk to banks and their customers. Although there is much less of an issue in the United Arab Emirates (UAE), but in many other countries, the Central Bank of the UAE (CBUAE) has introduced legislation to prevent such activities and the financing of terrorism, such as the Federal Law on Combating Terrorism Crime and Federal laws on money laundering punishable.
In response to the rising amount of money laundering cases in the Middle East have UAE banks have begun to reassess AML policies and procedures to ensure they comply with regulations CBUAE. According to Article 17 CBUAE Circular No. 24/2000, Compliance Officer of the bank responsible for providing training to all employees who are responsible for handling cash or manage accounts. But while regulatory documents and laws may insist that training is necessary or designate responsibility for compliance official at the bank, it often does not contain instructions on what training should cover or how to implement it.
To meet the requirements of CBUAE, UAE banks can take constant and consistent measures to protect their wealth and funds of their customers against terrorist financing by implementing training. UAE banks can best protect themselves and their customers from the potential risk of money by knowing CBUAE legislature, recognizing the signs of money laundering in the UAE and implementation of certified AML training.
The UAE and CBUAE have issued and implemented the law in order to control the threat posed by money laundering and terrorist financing. The following songs each address a different area of AML and protect the UAE from the risk of money laundering and terrorist financing
• Federal law on media Penal Code -. Summary punishment for the perpetrator who is not familiar with the property that they had originated from illegal or criminal manner.
• Federal Law Regarding the criminalization of money laundering – provides a detailed definition of the crime of money laundering and provides the means to freeze criminal assets such as bank accounts, related to money laundering.
• Federal Law on the fight against terrorism offenses – defines the elements and functions terrorism offenses and penalties for violations. The Law also allows to confiscate all proceeds that have resulted in criminal acts.
Over the past decade, governments and central banks around the world increase the pressure on banks and other financial institutions to set tighter control of their financial systems. Because of the position UAE as a major financial center in the Middle East, this causes a sensitivity UAE financial institutions to money laundering crimes. In 2009 alone, the UAE experienced a staggering 1,729 cases of money laundering.
As the industry evolves, UAE banks should implement AML training system to greatly reduce the amount of risk and to help employees understand how such training prevents risk. It is therefore important for banks in the UAE to use a variety of risk management practices and tools.
money laundering continues to be prominent in the UAE, informal banking that is functioning without training still unregulated. Rather than taking an advanced strategic approach to training, banks have focused on tools such as risk mitigation and risk elimination. These tools prove to be evasive and not nearly as effective as certified, customized training from an accredited provider.
The Bank Secrecy Act (BSA)
Any UAE banks working with the United States in any position will also be trained in secrecy Act (BSA) at US Bank to add other AML training. The BSA was enacted to help detect and prevent money laundering. The purpose of the BSA is to identify and analyze financial crimes. As part of the BSA, all financial institutions are required to meet certain conditions, such as to report large currency transactions exceeding $ 10,000, reporting suspicious activity and implementing BSA compliance program.
Basel II provides recommendations on banking laws and regulations, created to establish an international standard that can be used when creating regulations. Basel II generates the ability to measure and monitor risk and is a key tool to ensure the safety of UAE banks. It is also important to ensure the competitiveness of UAE banks as Basel II becomes fully implemented and practiced at financial institutions worldwide. As we enter a transitional period within the banking industry, there is a vital need for more skilled professionals in risk management in the UAE.
It is the responsibility of all banks operating in the UAE to ensure that every employee is properly trained in Anti Money Laundering. The CBUAE needs to lead banks in their methods of training to fight money laundering, however, it is the responsibility of the bank to implement and monitor training. AML training must be mandated bank management in order to manage risk as cases of money laundering continue to rise and threaten banks across the UAE.