UAE Central Bank imposes sanctions on six banks for compliance failure

[gengiskhan]

https://www.thenationalnews.com/bus...anctions-on-six-banks-for-compliance-failure/
No names provided

The UAE Central Bank imposed financial sanctions on six banks operating in the Emirates for failing to comply with required due diligence and reporting procedures and standards.

The unnamed banks were fined as per “Cabinet Resolution No. 9 of 2021”, related to the enforcement of certain provisions of the Organisation for Economic Co-operation and Development’s Multilateral Administrative Agreement for Automatic Exchange of Information and Common Reporting Standard (CRS), the banking regulator said in a statement on Thursday.

It did not provide further details on financial sanctions.

The CRS is a global methodology for the automatic exchange of financial accounts and tax-related information with other financial regulatory organisations across the world through secure channels, according to the central bank.

All banks operating in the UAE have been allowed ample time to put in place the CRS, it said.

The methodology sets out the required information to be exchanged, the types of financial institutions required to report, the different types of financial accounts and account holders in scope, as well as the common due diligence procedures to be followed by financial institutions.
The Central Bank said it was “committed to complying with all regulations aimed at strengthening the nation’s financial and banking system”.

This supports the UAE’s commitment to global initiatives to enhance the integrity and transparency of tax systems and combat tax evasion,” it said.
The move comes as the Central Bank has introduced a number of initiatives to regulate the country’s financial sector in recent months.
These include an enhanced regulatory framework to supervise banks’ exposure to the property sector and the issuance of guidelines to help licensed exchange houses combat money laundering and the financing of terrorism.
Last year, the regulator also instructed all hawala providers — informal fund transfer agents operating outside the banking system — to register in an effort to strengthen supervision of money transfers.
The Central Bank this week said it had penalised an exchange house operating in the country for failing to achieve the appropriate levels of compliance with anti-money laundering regulations.
The banking regulator imposed a fine of Dh5.2 million ($1.4m) against the exchange house in accordance with the law on anti-money laundering, combating the financing of terrorism and illegal organisations.

 

[Martin Everson]

So failure to comply with CRS . The OECD has really got their hands into UAE and cleaning them up. And like most gulf nations be careful, cause when they apply the law it is always applied without mercy especially if your a foreigner.

UAE has been cracking down hard on tax evasion hard in general and will continue to do so.

https://www.msn.com/en-ae/money/new...-9948-inspection-visits-in-h1-2022/ar-AAZRLF5

 

[Don]

9948 inspections and 1213 violations or roughly 12%.
What I find interesting is also the number "Notice of non-registered". I wonder if it refers to noticing those residing in UAE and operating entities in, e.g., Seychelles, US, yet failing to register a permanent establishment in UAE.

The UAE generally follows the definition of a PE in Article 5 of the 2014 OECD Model Tax Convention. Non-resident companies carrying out a trade or business in an Emirate through a PE in that Emirate are prima facie taxable under the relevant Emirate tax decree. The definition of PE generally includes a branch, place of management or other fixed place of business, and an agent that has and habitually exercises authority to conclude contracts on behalf of the non-resident company.

 

[OffshorePhantom]

If they start with those controls all the people which use US LLCs managed from Dubai (lots of them, especially in the e-commerce space) will have huge problems with the new corporate tax that will be implemented.

 

[troubled soul]

Use less info as the bank name is not mentioned....this type of news is joke to me. Because most local bank are own by government government put penalty on government...if you see thing in detaila it sounds really funny how system.operate here

 

[Fred]

Use less info as the bank name is not mentioned....this type of news is joke to me. Because most local bank are own by government government put penalty on government...if you see thing in detaila it sounds really funny how system.operate here

Very well observed - it doesn't say anything.

Can just re-cap here - last time we thought that due to FATF grey listing things take longer - the bank messed up a backend IT-integration and had to stop onboarding new clients for 1 month.

And we were naive enough to believe it's due some international pressure - looking at it from today it's funny -I know.