UAE warns non-registered Hawala operators, Deadline December 3


The UAE Central Bank will start taking legal action against non-registered Hawala service providers when registration deadline expires on December 2, 2020, after which no Hawala service provider will be allowed to operate in the country.

“After the deadline has expired, the Central Bank will impose the necessary legal and supervisory measures available in the law. This includes imprisonment and fine, in addition to administrative penalties which may include closure of the operating premises,” the Central Bank said in a statement

Hawala, also knowns as hundi, is a process whereby money value is transferred to individuals in other countries, and is usually used in remote places of those countries, which do not have access to banking services.

Regularising Hawala is an important element in Central Bank’s continuous efforts to maintain transparency of fund transfer transactions, and enhance the reporting systems as per the international standards, especially with regards to Anti-Money Laundering and Combating Terrorist Financing (AML/CFT).

As per provisions of Circular No. 24/2019 issued by the Central Bank, registration is mandatory for Hawala service providers, or informal money transfer service providers operating in the UAE, to regularise their status before December 2, 2020.

Regularising Hawala operators will bring transparency in transfer of funds and also the reporting systems as per the international standards, especially with regards to Anti-Money Laundering and Combating Terrorist Financing (AML/CFT).

Two penalties

Under the Central Bank regulations, a Hawala provider faces penalty in two cases. Firstly, if he fails to register by December 2, 2020, and secondly, if he, as a registered Hawala provider holding a registration certificate from the Central Bank, failed to comply with the requirements of the “Registered Hawala Providers Regulation”. Penalties for failure to register include fines and imprisonment.

The Central Bank monitors the concerned companies as well as audits their accounts because the “Registered Hawala Provider Regulations” and the Central Bank law confer powers to the competent departments at the apex bank to inspect and examine all areas of the business of Hawala.

How to register:

– Hawala providers are required to fill out and send the required documents available on the Central Bank website to to meet the necessary criteria regarding the registration process.

– Hawala service providers also need to fill out, sign and send the “Acknowledgment and certificate of Hawala Providers to re-register with CBUAE as registered Hawala Providers” which is available on Central Bank’s website.

– The document “Acknowledgment and certification of Hawala Providers for re-registration with CBUAE as registered Hawala Providers” includes connecting to the UAE Central Bank’s goAML system, which all Hawala Providers must complete prior to obtaining a final registration certificate from the Central Bank.

– In addition, Hawala Providers are obligated to comply with the requirements specified in Articles (4) and (5) of the regulations as well as the laws and regulations related to combating money laundering and financing of terrorism and illegal organisations in the UAE.

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