UAE's Bold Move Against Money Laundering

Revocation of Gomti Exchange License: UAE Cracks Down on Money Laundering

The Central Bank of the United Arab Emirates (CBUAE) has once again demonstrated how seriously it takes the regulation of the financial sector and the fight against money laundering. Recently, it revoked Gomti Exchange's operating license and removed it from the official register after uncovering serious irregularities during inspections.

Why was the license revoked?

The decision is rooted in the fact that the currency exchange failed to meet the obligations outlined in the Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations and Sanctions framework. Investigations conducted by the CBUAE revealed that the institution inadequately operated its internal control and compliance systems and did not comply with the requirements for money laundering prevention.

Legislative Background

The decision was made based on Article 137 of the UAE's Federal Law No. 14 of 2018, which allows for the revocation of financial institution licenses if they do not comply with the country's financial regulations. This law provides a comprehensive regulatory framework for the Central Bank and financial institutions' activities.

Strict Action Against Other Institutions

This was not the only similar action recently. On July 30, CBUAE also revoked the license of another currency exchange, Al Nahdi Exchange. Additionally, on July 29, it temporarily suspended a foreign insurance company's local branch from practicing motor insurance activities as it did not meet solvency and guarantee requirements.

Why is this important?

Such actions demonstrate that the UAE is committed to maintaining integrity in the financial sector. The country's aim is to ensure complete transparency in the operations of currency exchanges and insurance companies, thus preventing money laundering, terrorism financing, and other illegal financial activities.

Message to Market Players

The Central Bank's measures send a clear signal to players in the financial sector: compliance with rules is not optional but a duty. Every currency exchange, insurance company, and other financial institution is obliged to operate adequate compliance systems and continuously monitor their operations in light of regulatory expectations.

Summary

The UAE’s financial regulatory body continues to actively work to protect the country's economy from illegal monetary activities and financial abuses. The cases of Gomti Exchange and other recently sanctioned institutions serve as warnings to all market players that transparency, compliance, and ethical operations are essential requirements in the country's financial ecosystem.

(The source of the article is the Central Bank of the UAE (CBUAE) statement.)