Administrative and Financial Penalties for Emiratization Violations Regulation

CBUAE Classification: Public Administrative and Financial Penalties for Emiratization Violations Regulation

CBUAE Classification: Public CONTENTS
Page Subject
المقدمـــة 3 Introduction الهــدف 4 Objective Scope of Application 4 التطبيق نطـاق المادة )1( التعريفات 5 Definitions) 1 (Article and Prohibitions المادة )2( المحظورات وااللتزامات 6 Obligations Article (2) المادة )3( تقديم البيانات 7 Submission Data) 3 (Article Emiratization Fictitious المادة )4( نسب التوطين الصوري 7 Ratios Article (4) Administrative Penalties Article (5) Collection of Administrative and Financial Penalties
Article (6)
المادة )7( اإلخطارات 9 Notifications) 7 (Article Emiratization Fictitious المادة )8( عقوبات التوطين الصوري 9 Sanctions Article (8) المركزي 10 Grievance against the Central Bank Decisions Article (9) المادة )10( التفسير 10 Interpretation) 10 (Article Effective and Publication المادة )11( النشر وتاريخ النفاذ 11 Date Article (11) الجدول )1( 12 (1) Schedule

CBUAE Classification: Public Circu : 6/2025 2025 /6 : رقم تعميم lar No. /7/2025 Date التاريخ : /29 /7 2025 29 :
: Licensed Financial Institutions, Insurance Companies and To Insurance-Related Professionals : Administrative and Financial Penalties for Emiratization Violations Regulation Subject المقدمة Introduction In implementation of the Emiratization strategies and targets in the banking, financial and insurance sectors in the United Arab Emirates, the Central Bank of UAE has been mandated with establishing and implementing Emiratization strategies, targets and initiatives, and the adequate mechanisms to monitor the adherence of the Licensed Institutions to the same. The Central Bank mandate also involves the continuance and ongoing collection of contributions from the Licensed Institutions and the management and disbursement of these funds for Emiratization and fulfilling the qualifications of cadres within these sectors. This includes establishing adequate mechanisms to monitor the Licensed Institutions’ compliance with these strategies and initiatives; and imposing administrative penalties and sanctions, as deemed appropriate, on the Licensed Institutions. The monies collected from such penalties and sanctions will be used for Emiratization in the banking, financial and insurance sectors and qualifying and training the Nationals in these sectors, with the exception of the amounts transferred to NAFIS according to the prevailing legislation in this regard. This regulation is issued pursuant to the powers vested in the Central Bank under the following legislations:

• Decretal Federal Law No. (14) of 2018
  Regarding the Central Bank and Organization of Financial Institutions and Activities, and its amendments; :

CBUAE Classification: Public

• Decretal Federal Law No. (48) of 2023
  Regulating Insurance Activities; and -
• The Cabinet Resolution No. (47/5) of 2022,
  Session No (5).
  This regulation shall be interpreted and applied in accordance with the legislations mentioned above, as amended from time to time. Pursuant to this regulation, the Central Bank shall impose administrative and financial penalties and fines on the Licensed Institutions that fail to comply with the legislation and regulation in force. الهدف Objective Through the issuance of this regulation, the Central Bank intends to establish the necessary mechanisms to monitor the compliance of the banking, financial and insurance sectors in the State, in order to achieve the approved Emiratization targets within the specified timeframes. The Central Bank aims through this regulation to support the UAE Nationals’ job prospects in these sectors, prepare their empowerment plans within stimulating professional careers and achieve the approved Emiratization targets within the specified timeframes. The objective of this regulation is to define the violations related to the Emiratization targets, which includes, without limitation, falsifying the Emiratization percentage of ‘NAFIS’ initiatives and programmes, providing inaccurate information or documents to obtain the benefits related to ‘NAFIS’, and evading or circumventing the Emiratization requirements in the banking, financial, and insurance sectors within the State. Scope of Appl التطبيق نطاق ication This regulation applies to all Licensed Financial Institutions under the Decretal Federal Law No. (14) of 2018 regarding the Central Bank & Organization of Financial Institutions and Activities and its amendments, as well as any companies or persons

CBUAE Classification: Public licensed under the Federal Decretal Law No. (48) of 2023 Regulating Insurance Activities. المادة )1(: التعريفات Definitions :)1 (Article In the implementation of provisions of this regulation, and unless the context otherwise requires, the following words and expressions shall have the meaning assigned against each of them:
Central Bank: The Central Bank of the United Arab Emirates. 1.1 Central Bank Law: The Decretal Federal Law No. (14) of 2018 Regarding the Central Bank and Organization of Financial Institutions and Activities, and its amendments. 1.2 Insurance Law: The Decretal Federal Law No. (48) of 2023 Regulating Insurance Activities. 1.3 Emiratization: Employment of UAE Nationals, and is an initiative by the Government of the United Arab Emirates to employ its Nationals in a meaningful and efficient manner. 1.4 Licensed Institutions: The banks and other financial institutions licensed in accordance with the Decretal Federal Law No. (14) of 2018 regarding the Central Bank & Organization of Financial Institutions and Activities, and its amendments, and any company/Person licensed in accordance with the Federal Decretal Law No. (48) of 2023 Regulating Insurance Activities. 1.5 Beneficiary: UAE National Beneficiary from NAFIS. 1.6 NAFIS: Emirati Talent Competitiveness Council – NAFIS. 1.7

CBUAE Classification: Public National: A Citizen of the United Arab Emirates. 1.8 9-1 شخص: أ ًشخصًطبيعيًأوًاعتبار . .person juridical or natural Any :Person 1.9
1.10 State: The United Arab Emirates (UAE). .المتحدةًالعربيةًاإلماراتًدولة :الدولة 10-1
Tawteen System: The Central Bank’s platform established to facilitate and oversee the recruitment and employment of Nationals within the banking, financial and insurance sectors. 1.11
Article (2): Prohibitions and Obligations وااللتزامات المحظورات :(2 )المادة
No Licensed Institution shall circumvent the Emiratization targets by reducing the numbers, or by modifying the classification, of its workers, or any other form of circumvention as proven by the Central Bank. 2.1 No Licensed Institution shall submit to the Central Bank any data or information that have fictitious Emiratization ratio in violation of any of the ratios provided related to Emiratization as well as NAFIS programmes and initiatives. 2.2 The Licensed Institution must not submit incorrect documents, data, information or reports to obtain services, benefits or incentives related to NAFIS programmes, or from evading or circumventing the Emiratization targets in any manner determined by the Central Bank. 2.3 The Licensed Institution must notify the Central Bank immediately if the Beneficiary does not regularly work with them after onboarding. 2.4 The Licensed Institution must notify the Central Bank of any change in the terms and conditions of use of amounts/contributions and provide the rationale for the change which is acceptable to the Central Bank. 2.5

CBUAE Classification: Public .(1) The Licensed Institutions that violate the above-mentioned provisions shall be subject to the financial and administrative penalties and sanctions as outlined in the attached Schedule (1). 2.6 المادة )3(: تقديم البيانات Submission Data :)3 (Article All Licensed Institutions are required to submit staff data to the Central Bank – including separate reporting data on UAE Nationals and Expatriates as outlined by the Central Bank. 3.1 2-3 تُصن ًعملياتًتقديمًالبياناتًإلاًفئتين: two into classified are submissions Data categories; 3.2 a) Key positions: requiring detailed data entries and comprehensive documentation as required by the Central Bank. b) Non-key positions: requiring data submission with no additional data or documentation required. المادة )4(: نسب التوطين الصور Ratios Emiratization Fictitious :)4 (Article If Licensed Institutions perform fictitious Emiratization of Nationals, the number of Nationals subject to the violation will not be counted within the defined total Emiratization Ratios. 4.1 Art واإلدارية المالية الجزاءات :(5 )المادة icle (5): Financial and Administrative Penalties The violation of any provision of this regulation or the commission of any violations provided may subject the Licensed Institution to administrative and financial sanctions or penalties or precautionary measures, as deemed appropriate by the Central Bank. 5.1

CBUAE Classification: Public Without prejudice to any more severe penalties or procedures that may be stipulated in any legislation in force, the Central Bank has the right to impose financial and administrative penalties on the Licensed Institutions that commit any of the violations set forth in Schedule (1) of this regulation, pursuant to Article (2). If a Licensed Institution commits more than one violation, the Central Bank may impose multiple penalties, as outlined in
Article (2) and the attached Schedule (1).
5.2
If the Licensed Institutions received any benefit or advantage from any ministry, council, fund, authority or any other government authority granted by the legislation in force in the State, the Central Bank shall oblige the Licensed Institutions to refund any financial incentives received by the National to any of the entities mentioned in this clause. The Licensed Institutions may not claim or request the National to refund the value of the financial incentives paid to those parties. 5.3 The Central Bank may oblige the Licensed Institutions to pay all the financial incentives to the National, including financial incentives, privileges and benefits as defined by the legislation in force or any government authority in the State, in case it is decided to suspend such financial incentives, privileges and benefits for Licensed Institutions as result of their violation of any of the provisions of this regulation. In all cases, the Licensed Institutions shall not have the right to claim refund of the aforementioned from Nationals. 5.4 The Central Bank may decide, at its own discretion, to decrease the minimum, exempt completely, increase or pay in installments the financial and administrative penalties and sanctions as outlined in this regulation 5.5

CBUAE Classification: Public المادة )6(: تحصيل الجزاءات اإلدارية والمالية and Administrative of Collection :)6 (Article Financial Penalties The Central Bank may collect the administrative and financial penalties stipulated in this regulation through its approved payment methods. The Central Bank may take all the necessary legal proceedings to ensure the collection of such penalties. 6.1 The Central Bank shall also have the right to collect any financial penalties imposed on the Licensed Institutions from any liquid funds, bank deposits or any other funds in its possession, in the cases where the Licensed Institutions refrain from paying the imposed penalties or sanctions, within maximum period of (10) ten working days from the notification date of the imposed penalty. 6.2 Artic اإلخطارات :(7 )المادة le (7): Notifications The Central Bank may notify NAFIS and/or the relevant judicial authorities or any concerned party of any violations committed by the Licensed Institutions as outlined in this regulation. 7.1 icle (8): Fictitious Emiratization Sanctions Without prejudice to the penalties included in the attached schedule (1) of this regulation, the Licensed Institutions that circumvent the provisions of this regulation and any of the decisions or circulars regulating Emiratization issued by the Central Bank, by appointing Nationals in a fictitious manner, shall be punished by a fine of not less than one hundred thousand (100,000)ًًEmirati dirhams nor above one million (1,000,000) Emirati dirhams. 8.1 The Central Bank may require the Licensed Institutions to refund to the relevant authority any financial incentives disbursed to Nationals in cases of 8.2

CBUAE Classification: Public fictitious Emiratization. The Licensed Institutions are not permitted to request the National to refund any financial incentives paid to any of the concerned authorities on his behalf. The penalties stipulated in this clause shall be multiplied in proportion with number of Nationals who were appointed fictitiously. The Central Bank may decide, at its own discretion, to oblige the Licensed Institutions to train and qualify nationals who have been subjected to fictitious Emiratization. All related expenses shall be borne by Licensed Institutions proven to have carried out fictitious Emiratization. The Central Bank may also, in cases of fictitious Emiratization, and after the citizen’s completion of training and qualification mentioned in this clause, oblige Licensed Institutions to increase their comprehensive monthly salary between 10% to 30%. 8.3 المادة )9(: التظلم من قرارات المصرف المركز Bank Central the against Grievance :)9 (Article Decisions The decisions of the Central Bank issued to impose the financial and administrative penalties stipulated in this regulation are final, and may not be appealed by any means, except by filing grievance to the Central Bank within (10) ten working days from the notification date of the imposed penalty. 9.1 المادة )10(: التفسير Interpretation :)10 (Article The Regulatory Development Department of the Central Bank shall be the reference for the interpretation of the provisions of this regulation. 10.1

CBUAE Classification: Public
Article (11): Publ النفاذ وتاريخ النشر :(11 )المادة ication and Effective Date
This regulation shall be published in the Official Gazette in Arabic and English and shall be effective immediately on its publication. 11.1 Khaled Mohamed Balama Governor of the Central Bank of the UAE

CBUAE Classification: Public
Table (1)
Fines
No. Violation
Description 1st time 2nd Time 3rd time or any repetition after the 2nd time

1. The Licensed
   Institutions’ submission of incorrect documents or data in order to obtain the services or benefits related to NAFIS or to evade or circumvent the Emiratization process. Imposition of administrat ive fine of twenty thousand (20,000) Emirati dirhams per case. Imposition of administrati ve fine of fifty thousand (50,000) Emirati dirhams per case. Imposition of administrati ve fine of (AED 100,000) one hundred thousand Emirati dirhams per case. )100,000( )50,000( )20,000(

CBUAE Classification: Public
2. The Licensed
Institutions’ failure to inform the CBUAE, by updating the prescribed system, when:

• A
  Beneficiary, after joining the Licensed Institutions, does not work on a full-time basis; or
• If the
  Beneficiary ceases to work for the Licensed Institution. Imposition of administrative fine of twenty thousand (20,000) Emirati dirhams for every National.

3. The Licensed
   Institutions’ failure to report any change made to the terms of benefit without a reason acceptable to the CBUAE. Imposition of administrative fine of twenty thousand (20,000) Emirati dirhams for every National.

CBUAE Classification: Public
4. The invalidity or
non-renewal of the required documents within the specified period. Imposition of administrative fine of five thousand (5,000) Emirati dirhams.