3.1. AML/CFT Obligations under CBUAE Regulations
The CBUAE regulatory framework clearly state expectations for compliance with AML/CFT obligations. In addition to this guidance, LFIs including non-bank payment service providers should carefully review all the relevant regulations issued by the CBUAE, which provide a comprehensive coverage of all payment products, services, and systems that are issued, provided and/or operated in the UAE, to ensure they fully understand and comply with their obligations.
3.1.1. Providers of Stored Value Facilities
In November 2020 the CBUAE issued the Stored Value Facilities (SVF) Regulation (Circular No. 6/2020 issued by Notice 4834/2020). Under its Article 14, all licensees must comply with the existing legal obligations and regulatory requirements for AML/CFT of the CBUAE and address ML/FT risks through appropriate preventive measures to deter abuse of the sector as a conduit for illicit funds, detect ML/FT activities, and report any suspicious transactions to the UAE Financial intelligence Unit (UAE FIU). Among their detailed regulatory obligations, the licensees must assess the risk level of business relationships and undertake periodic risk profiling and assessment of products based on the AML/CFT requirements.
3.1.2. Retail Payment Services and Card Schemes Regulation
In July 2021 the CBUAE issued the Retail Payment Services and Card Schemes Regulation (Circular No. 15/2021 issued by Notice 3603/2021). Under its Article 12, payment service providers must comply with the relevant UAE AML/CFT laws and regulations and address ML/FT risks through appropriate preventive measures to deter abuse of the sector as a conduit for illicit funds, detect ML/FT activities, and report any suspicious transactions to the UAE FIU. Among their detailed regulatory obligations, the licensees must conduct business relationship-specific risk assessments and undertake periodic risk profiling and assessment of retail payment service users based on AML/CFT requirements. In addition, under Article 18.14, card schemes must report transactions to the UAE FIU when there are suspicions, or reasonable grounds to suspect, that the proceeds are related to a crime, or to the attempt or intention to use funds or proceeds for the purpose of committing, concealing or benefitting from a crime.
3.1.3. Large Value and Retail Payment Systems Regulations
In March 2021 the CBUAE issued the Large Value Payment Systems Regulation (Circular No 9/2020 issued by Notice 1410/2021) which covers clearing and settlement systems designated primarily to process large-value and/or wholesale payments typically among financial market participants or involving money market, foreign exchange or many commercial transactions. In tandem, the CBUAE issued the Retail Payment Systems Regulation (Circular No. 10/2020 issued by Notice 1408/2021) which covers fund transfer systems and related instruments, mechanisms, and arrangements that typically handle a large volume of relatively low-value payments in such forms as cheques, credit transfers, direct debit, card payment transactions or a regulated medium of exchange. Among their detailed regulatory obligations, all licensees are required to comply with any instructions issued by the CBUAE and any relevant international standards.