BY PMA RASHEED
As the Central Bank has given instructions to the financial sector of the country to implement additional responsibilities for preventing illegal transactions, many customers hesitate to approach money exchange houses.
Even though the regulations have existed for exchanges, the new set of rules is intended to keep track of considerably more transactions. The Central Bank issued the new circular in which it has adopted additional measures to combat money laundering and terrorism financing.
The strict anti-laundering rules force customers to register their personal details if they want to remit amount of Dhs2,000 ($544) and above from the country. Money senders also have to reveal the source of the income if they wish to exchange big amounts. Anyone who wishes to exchange more than Dhs2,000 must register their details, as ordered by the Central Bank circular.
Money senders have also to reveal about the source of the money. Those who want to wire more than Dhs3,500 through a bank, may face further scrutiny such as compulsory registration of their name, address and account number. The limit to send money through a bank has also been lowered than the previously allowed figures.
Leading money exchange houses mentioned that, even though the strict measures will cause losing our customers, they have to take utmost care to prevent illegal money senders.
Meanwhile, it's not compulsory to register the details of the beneficiaries abroad.
"The rules had been imposed by the Central Bank in 2001. Some additions have been made recently to take extra care regarding the prevention of money-laundering and funding for terrorism. Earlier, any transaction of big amount was subject to scrutiny. Now, it has been fixed to Dhs2000, increasing our responsibility to prevent illegal money transfers," said James, compliance officer at the Sharjah branch of UAE exchange.
He added, "Some customers are aware of it, but some others are not willing to co-operate. We don't receive any transaction above Dhs2000, if the remitter refuses to register his personal details and ID. Bulk amount senders should reveal the source of the income by producing bank statements and supporting documents in the cases of savings or loans. When we inquire the money source or purpose of transaction, some customers do respond about asking many questions. We keep a watch on the receivers also, if they receive money regularly. We will also monitor that beneficiary who receives money from many people."
Tasnif PK, Branch Manager at Al Ansari Exchange pointed out, "We are getting so many calls and inquiries daily regarding the new drive to register remitters' personal details. Some people are aware of it and they co-operate with us. But some others are doubtful."
"The rule has been implemented for five years. For sending upto Dhs2,000, the disclosure of source is not required. For outward transfers above Dhs40,000 we ask customers to sign a special document called '40KOUT', as well as '40KIN' for inward transfers above Dhs40,000. If we sense any doubt about the customer who is regularly sending or receiving big amounts, we have got a procedure named 'KYC- Know Your Customer' -- to report our compliance officer."
"If exchange houses are not following the AML (Anti money laundering) regulations, the drawing arrangements won't be available from the Central bank and foreign banks, which strictly observe the execution of the norms. So, we have to explain customers about the seriousness of the rule. We don't make any transaction of above Dhs2000 without confirming the personal details of the customers," he explained.
Muhammad Atif, Internal auditor and compliance officer at Al Fardan Exchange said, "This is right move at right time. These measures will help us to strengthen our policies and procedures. Since it was issued in 2000, we are registering details of customers. Now Central Bank has cleared that customer name, account number and address to be taken. It will further help to identify the facts about the customer.
"As for customer response on this specific regulation, I will say that our customers are used to obey and give us required details. We don't give any excuse to customer on implementing the rules. These measures will help a lot, as far other clauses Central Bank has cleared regarding issues like On Going Due Diligence, Beneficial Ownership, FPEPs, Risky Business and STRs," he added.
"But if the Central Bank issues separate guidelines for exchange houses and banks it will make the procedures more transparent, as the lion's share of remittance are done through exchange houses in the UAE," Atif pointed out.
The Central Bank's move is inspired by the worldwide guidelines issued by the Financial Action Taskforce, recommending every country to take mandatory anti-laundering measures in the financial sector. The guidelines of the body run by International Monetary Fund (IMF), has designed nine particular recommendations to prevent money laundering specifically for funding terrorism.
Source: Gulf Today