The UAE Central Bank has imposed financial penalties on six banks operating in the country for failing to comply with due diligence as well as reporting procedures and standards, according to the Emirates News Agency (WAM).
The sanctions imposed on the lenders are pursuant to Cabinet Resolution No. 9 of 2021, which is related to the Organisation for Economic Cooperation and Development (OECD)’s Multilateral Administrative Agreement for Automatic Exchange of Information and Common Reporting Standard (CRS).
The CRS is a global methodology for the automatic exchange of financial accounts and tax-related information with other financial regulatory organizations across the world through secure channels.
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.
Financial sanctions are imposed when banks fail to meet required levels of compliance in terms of due diligence, reporting procedures, and standards. All banks operating in the UAE have been allowed ample time to put in place the CRS, it said.
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.
