The guidance, which came into effect on 17 November 2021, will assist LEH’s 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 LEH to demonstrate compliance with its requirements within one month. As stipulated in the guidance, LEH must maintain an effective AML/CFT programme designed to prevent misuse of their business to facilitate money laundering or terrorist financing.

LEH must take a risk-based AML/CFT approach by conducting a regular risk assessment process that covers all commensurate risks to their exchange business, including customer, products and services, delivery channel, new technologies, geographic, counterparty and illicit finance risks. In tandem, the risk assessment findings should inform the programme’s comprehensive policies, procedures, internal controls, and employee training to mitigate risks effectively.

Further essential components of the AML/CFT programme include dedicated compliance function, strong customer due diligence, continuous transaction monitoring and full compliance with the UAE’s requirements on Targeted Financial Sanctions and Suspicious Transaction Reporting. The CBUAE issued AML/CFT Guidance recently on these components, which are applicable to all its Licensed Financial Institutions.