UAE Central Bank cracks down on lender with $1.36m fine for anti-money laundering violations

In a decisive move to strengthen the UAE’s fight against financial crime, the Central Bank has fined an unidentified lender Dh5 million ($1.36 million) for violating anti-money laundering (AML) regulations. 

The lender, which breached three key laws governing financial institutions and terrorist financing, now faces not only the hefty penalty but must also present the decision to its board of directors at its overseas headquarters, according to a statement from the Central Bank.

This latest enforcement action underscores the UAE’s commitment to maintaining the transparency and integrity of its financial system. “The Central Bank, through its supervisory and regulatory mandates, works to ensure that all banks, their owners, and staff abide by the UAE laws, regulations, and standards adopted … to safeguard the transparency and integrity of the banking industry and the UAE financial system,” the Central Bank emphasized.

The move comes as part of a broader campaign by the UAE to combat illicit financial activity, following the introduction of its 2024-2027 National Strategy for Anti-Money Laundering and Countering the Financing of Terrorism and Proliferation Financing. Developed using World Bank Group methodology, the strategy outlines 11 key goals designed to prevent illegal activities from impacting society and ensure compliance with international standards.

Globally, anti-money laundering enforcement has intensified, with financial institutions facing fines totaling $6.6 billion in 2023—a 57% increase from the previous year, according to data from London-based Gatenox. In line with this global trend, the UAE has been enhancing its legislative framework, having amended its anti-money laundering laws in August and established a National Committee to oversee the sector.

This latest fine follows a similar penalty imposed just last month, when another UAE-based bank was fined Dh5.8 million for AML breaches. Regulatory authorities have stepped up efforts, with fines in the field of AML and Counter-Terrorism Financing reaching Dh249.2 million in 2023, significantly up from Dh76 million the previous year.

The UAE’s crackdown on financial crime reflects its growing role on the international stage, with its robust policies aiming to preserve the country’s reputation as a transparent and secure financial hub.