The UAE Central Bank said it imposed AED 1.92 million as penalty on an exchange house for not carrying out proper due diligence and not adhering to rules to prevent money laundering.

The regulator said financial sanctions were imposed on the company after an investigation revealed that the exchange house had failed to obtain letters of no objection from the Central Bank to enter into certain business relationships. The name of the exchange house has not been disclosed.

The regulator in the past year has imposed several financial sanctions on exchange houses for not adhering to rules. The exchange outlet, which remains unidentified, was found to have a weak compliance framework regarding the required due diligence policies and procedures to prevent money laundering and financing of terrorism.

Over the last two decades, the Gulf region, especially the United Arab Emirates (UAE) and Saudi Arabia, has cemented its reputation as one of the top business hubs globally where workers can earn more. This monumental stride has led to the influx of foreign nationals into the region for tourism, labour, and entrepreneurship. Exchange houses have become increasingly popular with the mix of expats in this region who will be looking to send money to their families back home.

Currently, exchange houses hold a special place in the Middle East economy, especially in terms of remittances. After regulation by UAE authorities in 2009, the remittance industry ranked ahead of several developed and developing nations. Exchange houses deal with billions of dollars’ worth of transactions every year and this number continues to grow.

The Central Bank said it will ensure that all exchange houses, their owners and staff abide by the UAE laws, regulations and standards to safeguard the transparency and integrity of the UAE financial system.

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004