Article (4): Data Reporting on Cross Border Transactions (SWIFT Cross-Border Payment Transactions)
The Central Bank has the mandate to prepare and publish the statistics of the balance of payments and the international investment position for the UAE in line with international standards.
To enhance the quality of the data for cross-border transactions and ensure better control of the relevant flows, instituting a purpose of payment is critical. To that end, the Central Bank has established a mandatory requirement in its reporting process to capture the purpose of the payment for all cross-border transactions in a reliable and accurate way. This facilitates the collection of the required information directly from the customers of the Licensed Financial Institutions and facilitates the collection of information to account for all transactions in and out of UAE borders by residents of the UAE.
The Licensed Financial Institutions are required to provide customers with the full list of purpose codes as published by the Central Bank without merging or amending the list and to comply with the following requirements:
a) To provide purpose codes when initiating SWIFT cross-border payment transactions under Central Bank Notice No. CBUAE/BSD/N/2018/759 dated 23 May 2018; that is: “to assist the Central Bank in the compilation of the balance of payments, all SWIFT transfers messages need to include a payment purpose code according to the list of codes that are published on the Central Bank’s website under the balance of payments guidelines, along with a description, explanation by code and examples”;
b) To register for the Fin-toform services as required, enabling the Central Bank to collect information from the SWIFT messages initiated by the Licensed Financial Institutions as required, under Central Bank Notice No. CBUAE/BSD/N/2018/759 dated 23 May 2018, that is: “the Licensed Financial Institutions need to report to the Central Bank on a transaction by transaction basis:
i. Swift messages: All customer transfer messages between Licensed Financial Institutions from the UAE to overseas institutions in all currencies (Outflows) or from overseas institutions to the UAE (Inflows)
ii. Non-Swift messages: All customer transfer messages between Financial Institutions in the UAE from resident accounts to non-resident accounts within the UAE banking system in all currencies and from nonresident and resident accounts; And/or cross border transactions between their own branches, residents in the UAE and outside the UAE”
c) To provide the required information by using the required purpose codes as specified in the official list of SWIFT Scope purpose codes.
d) Licensed Financial Institutions can provide the required purpose codes by using any of the following options:
i. Option 01: using TAG 77B ii. Option 02: using TAG 72 iii. Option 03: using TAG 70 iv. Option 04: using TAG 26T
“TAG” in this Article refers to a specific place holder in a SWIFT message that contains specific data.
e) Technical notes on transaction codes for the compilation of the balance of payments is published on the Central Bank website: Document Code - UAEFTS- AUX700 - 2018-001-01 dated November 2018.
f) The exchange houses that send transfer messages from the UAE, to institutions outside the UAE, in all currencies or receive transfer messages from institutions outside the UAE, in all currencies, must report to the Central Bank, transaction by transaction including the purpose code.
Failure to provide the required information and to use the designated TAG with the correct purpose codes is a violation of the aforementioned Notice and will result in a fine of AED 1,000 for each violation.