UAE Exchange House Fined AED 2 Million for AML Violations: A Regulatory Warning for Financial Institutions
Nisna K Muhammed
Senior Legal Correspondent
In a strong enforcement action, the Central Bank of the UAE (CBUAE) has imposed an administrative penalty of AED 2 million on a money exchange house operating in the country for failing to comply with anti-money laundering and counter-terrorism financing (AML/CFT) regulations. The penalty was issued under Article 137 of Decretal Federal Law No. (14) of 2018, which governs the regulatory oversight of financial institutions in the UAE.
The CBUAE conducted an investigation that revealed significant deficiencies in the exchange house’s internal controls, compliance procedures, and reporting obligations relating to AML/CFT frameworks. This regulatory action underscores the CBUAE’s commitment to safeguarding the transparency and integrity of the UAE's financial system.
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Importantly, the Central Bank has reiterated that all exchange houses, including their management and employees, are expected to demonstrate full adherence to applicable UAE laws and international compliance standards.
Implications for Indian Stakeholders
For Indian legal and financial professionals engaging with UAE-based entities or advising clients with cross-border remittance, fintech, or exchange operations in the GCC, this development reinforces the need for:
- Robust AML/CFT compliance programmes;
- Regular internal audits and training of personnel;
- Strict adherence to regulatory reporting timelines and frameworks;
- Understanding jurisdiction-specific enforcement trends.
The case also serves as a cautionary example for Indian exchange houses and fintech platforms licensed by the RBI or operating under FEMA and PMLA regulations. Given the increasing global convergence in financial compliance, regulators in both jurisdictions are adopting a zero-tolerance approach to lapses in AML/CFT obligations.
