4 Regulation and Supervision of RHP in the UAE
The CBUAE permits legitimate Hawala Activity as an important element of its continuous efforts to support financial inclusion and bring the unbanked population into the regulated financial system. To this end, Hawala is regulated by the Registered Hawala Providers Regulation issued by the CBUAE (``Circular No. 24/2019''). As per its articles 2.1 and 7.1 and Article 26 of the AML-CFT Decision, all providers carrying on Hawala Activity in the UAE must hold a Hawala Provider Certificate issued by the CBUAE; it is not permitted to carry on Hawala Activity without being registered with the CBUAE. RHP are supervised by the CBUAE, who has the right to examine the business of RHP and their agents and customers whenever it deems appropriate to ensure proper compliance with their statutory obligations under the legal and regulatory framework in the UAE, or impose supervisory action or administrative and financial sanctions for violations. Similar to its all LFIs, the CBUAE applies the principle of proportionality in its supervision and enforcement process, whereby small RHP may demonstrate to the CBUAE that the objectives are met without necessarily addressing all of the specifics cited in the legal and regulatory framework in the UAE.
4.1 Permitted and non-permitted services by RHP
RHP are only permitted to provide well-defined services, which include non-commercial personal remittances and money transfer services to support commercial operations (such as trade transactions with jurisdictional corridors serviced by the hawala community).
RHP are not permitted to engage in any of the following transactions:
• Take deposits, exchange currencies or sell and purchase travellers' cheques; • Provide any financial services other than money transfers (e.g. exchange of virtual assets/cryptocurrencies, loans, purchase of debts); or • Execute transactions involving or on behalf of any other hawala provider in the UAE (as they are required by Circular No. 24/2019 to manage their business personally and never assign such task to another person, also known as "nesting''). This excludes the agents of the RHP in a foreign country (see also Part II section 3.3.5 below).