Recently, the Central Bank of the UAE (CBUAE) issued new AML/CFT guidance on the risks related to politically exposed persons (PEPs). The objective of this guidance is to help licensed financial institutions (LFIs) enhance their understanding and mitigation of PEP-associated ML/TF risks and AML/CFT obligations. As per the guidance, LFIs must comply with its requirements within one month of its publication.
Since transactions involving PEPs often present an increased ML/TF risk, LFIs must conduct additional specific due diligence checks on PEPs, their family members, and close associates in addition to the standard due diligence required for all customers. The CBUAE further specifies that LFIs with PEPs as customers must develop risk-based policies (including risk rating and due diligence measures) to ensure that they identify all PEPs before starting a business relationship.
LFIs must also continuously monitor the business relationships of PEPs. Further, the LFIs’ transaction monitoring systems must be able to identify suspicious financial activity and report such behavior to the UAE’s Financial Intelligence Unit. Furthermore, the LFIs must include these measures in their AML/CFT compliance program, and ensure appropriate oversight and training in this area.
Source: Central Bank of the UAE
