CBUAE issues new guidance on anti-money laundering

The Central Bank of the UAE (CBUAE) has issued a new guidance on anti-money laundering and combatting the financing of terrorism (AML/CFT) for the Licensed Financial Institutions (LFIs) in the insurance sector comprising insurance and re-insurance companies, agents and brokers.

The guidance, which comes into effect immediately, will assist LFIs’ understanding of risks and effective implementation of their statutory AML/CFT obligations, and takes Financial Action Task Force (FATF) standards into account. The guidance requires LFIs to demonstrate compliance with its requirements within one month.

The guidance discusses the money laundering and financing of terrorism risks (ML/TF) relevant to life insurance and other investment-related insurance products, and how insurance operators can apply preventive measures to identify, assess, manage, and mitigate them.

Insurance operators are required to perform, document, and keep up to date an enterprise risk assessment.

They must perform customer due diligence, understand the nature of the customer’s business and the nature and purpose of the operator’s relationship with the customer, including the expected uses to which the customer will put the operator’s products or services, and subject all customers to ongoing monitoring throughout the business relationship. Moreover, the operators must apply enhanced due diligence measure if they identify a customer or relationship presenting higher ML/TF risks.

WAM