In a recent development, the Central Bank of the UAE (CBUAE) has announced the cancellation of licenses for a prominent money exchange house and a commercial broker company due to serious regulatory misconduct. The move comes as part of the CBUAE's commitment to upholding stringent financial regulations within the UAE.
The money exchange house in question, known as Dirham Exchange, had its license revoked and its name removed from the Register by the CBUAE. This stern action was taken in response to the company's grave violations of regulatory laws. Similarly, the registration of RMB Commercial Brokers Co., a well-known commercial broker operating within the UAE, was also revoked by the regulator.
The imposition of administrative sanctions followed a well-defined appeals process, as specified in Article 137 of the Decretal Federal Law No. (14) of 2018 concerning the Central Bank and the Organization of Financial Institutions and Activities. Furthermore, Article 14 of the Federal Decree Law No. (20) of 2018 pertaining to the Combating of Money Laundering (AML) Crimes, Terrorism Financing, and the Financing of Illegal Organizations also played a crucial role in shaping these actions.
The Central Bank's decision to impose administrative sanctions stemmed from its discovery of significant regulatory misconduct by the aforementioned entities. These violations encompassed issues related to anti-money laundering practices and instances of colluding to evade the Central Bank's explicit instructions. Notably, the Central Bank had previously instructed the exchange house to refrain from engaging in remittance transactions with certain countries.
An investigation into the matter revealed that both companies displayed weaknesses in their compliance frameworks. Moreover, they failed to fulfill their regulatory obligations and neglected to report instances of regulatory breaches to the CBUAE. This non-compliance with established regulations and obligations was a key factor that led to the imposition of sanctions.
The Central Bank emphasized its unwavering commitment to upholding UAE laws, regulations, and standards within the financial sector. This commitment extends to all exchange houses, their proprietors, employees, and Hawaladars, in order to ensure the transparency and integrity of the UAE's financial system.
Earlier this year, the Central Bank had taken similar actions against Al Rasheed exchange company, revoking its license and removing its name from the Register due to serious regulatory misconduct. Additionally, registrations for Seagull Insurance Services Co. and Al Shorafa Insurance Services were cancelled in June for their violations of prevailing laws.
As the CBUAE continues its efforts to ensure a secure and transparent financial environment, instances of regulatory violations are being met with firm administrative actions. This approach underlines the Central Bank's commitment to maintaining the highest standards of financial integrity and regulatory compliance within the UAE.