New guidance has tightened scrutiny on clients, trade flows, and cross-border banking risks.
Dubai: The Central Bank of the UAE has introduced updated anti-money laundering (AML) and counter-terror financing guidelines, increasing compliance requirements for banks and money transfer operators.
The update establishes clearer supervisory standards for customer due diligence, trade finance oversight, and correspondent banking, with increased emphasis on detecting risks related to proliferation financing and cross-border transactions.
The move brings licensed financial institutions and registered hawala providers under tighter oversight, requiring them to enhance internal systems that detect suspicious activity at an earlier stage and ensure more consistent responses.
Sharper focus on financial crime risks
The update introduces a more structured approach to risk identification, requiring institutions to assess exposure to proliferation financing, identify weaknesses in their control frameworks, and continuously monitor emerging patterns of illicit financial activity.
Trade-based money laundering and transshipment risks have also come under increased scrutiny, with banks required to develop deeper visibility into trade flows and strengthen monitoring of complex cross-border transactions that may be used to conceal illicit funds.
Correspondent banking relationships—often considered higher risk due to their cross-border nature—are another key focus area, with clearer expectations for due diligence and ongoing monitoring of partner institutions.
“At the CBUAE, we aim through these guidelines to raise awareness within the financial sector and enable Licensed Financial Institutions and Registered Hawala Providers (RHPs) to monitor emerging risks and prevent them effectively, efficiently, and responsibly. We are moving forward in developing a robust national framework to combat financial crimes, establishing a resilient financial system, and actively contributing to safeguarding the stability of the global financial system,” said Khaled Mohamed Balama, Governor of the CBUAE.
Stricter customer checks and data requirements
Customer due diligence rules have been tightened, requiring institutions to take a more detailed approach to verifying identities, assessing risk profiles, and maintaining comprehensive records throughout the entire client relationship lifecycle.
The guidance also clarifies how simplified and enhanced due diligence should be applied, along with stricter requirements for the types of documentation that must be collected and retained.
This shift requires compliance teams to go beyond initial onboarding checks and maintain ongoing monitoring, especially for higher-risk clients and transactions.
Risk-based approach and workforce readiness
In parallel with the regulatory updates, the central bank has issued best practice manuals encouraging institutions to adopt a risk-based approach across all operations.
Banks and exchange houses are expected to develop structured frameworks to assess institutional risk and ensure their controls match the scale and nature of those risks, while also strengthening internal training and capacity-building programmes.
The focus on role-based training highlights a broader effort to ensure that staff at all levels, including senior management, are properly equipped to recognise suspicious activity patterns and respond effectively.
Strengthening global positioning
The update aligns with the UAE’s national strategy for 2024–2027 and with international standards set by the Financial Action Task Force (FATF), reinforcing efforts to keep the country’s financial system in line with global expectations.
Khaled Mohamed Balama, Governor of the Central Bank of the UAE, said the new package is intended to strengthen the country’s position in combating financial crime and further enhance its reputation as a secure global financial hub.
“The issuance of this new regulatory guidance package reflects the CBUAE’s commitment to strengthening the UAE’s leadership in anti-money laundering, counter-terrorism financing, and combating proliferation financing, in line with the highest international standards, while enhancing its position as a secure and trusted global financial hub,” he said.
He added that the guidance is designed to help institutions identify and manage emerging risks more effectively, while supporting a stronger national framework that promotes financial stability.
