Registered Hawala Providers Regulation

REGISTERED HAWALA PROVIDERS REGULATION

Table of Contents

Subject	الصفحة Page	الموضوع
OBJECTIVE	3	الهدف
APPLICATION	4	التطبيق
Article (1): Definitions	4	المادة (1): تعريفات
Article (2): Registration and Certificate Requirements	5	المادة (2): متطلبات التسجيل والشهادة
Article (3): Notification of Approval/Rejection & Certificate Conditions	8	المادة (3): الإخطار بالموافقة/الرفض وشروط الشهادة
Article (4): On-Going Obligations of Registered Hawala Providers	8	المادة (4): الالتزامات المستمرة لوسطاء الحوالة المسجلين
Article (5): Specific Obligations With Regard to ML/FT Risks	10	المادة (5): التزامات محددة بشأن مخاطر غسل الأموال/تمويل الإرهاب
Article (6): Supervision and Examination	11	المادة (6): الإشراف والتفتيش
Article (7): Enforcement and Sanctions	11	المادة (7): التنفيذ والجزاءات
Article (8): Interpretation of the Provisions of the Regulation	11	المادة (8): تفسير أحكام النظام
Article (9): Cancellation of Previous Resolutions	12	المادة (9): إلغاء القرارات السابقة
Article (10): Publication and Application	12	المادة (10): النشر والتطبيق

REGULATION ON REGISTERED HAWALA PROVIDERS

Circular No: 24/2019
Date: //2019
To: Registered Hawala Providers
Subject: Registered Hawala Providers Regulation

The Chairman of the Board of Directors of the Central Bank,

Having perused provisions Federal Law No. (7) of 2014 regarding Combating Terrorist Crimes; Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organization of Financial Institutions and Activities; Decretal Federal Law No. (20) of 2018 on Anti-Money Laundering and Countering the Financing of Terrorism and Illegal Organizations and its Executive Regulations; The Central Bank Board of Directors’ Resolution No 20/2/2019 regarding approving the Registered Hawala Providers Regulation; and National Anti-Money Laundering Committee’s decision in its meeting of 14 June 2012.

Has decided the following:

Objective:

The objective of this Regulation is to provide a regulatory framework for Hawala Providers in the UAE in order to operate within the UAE financial sector in a robust and prudent manner. As such, the framework set out in this Regulation is aimed at protecting the customers of Registered Hawala Providers and the reputation of the financial system of the UAE.

This Regulation is issued by the Central Bank pursuant to the powers vested in the Central Bank Law.

Where this Regulation includes a requirement to provide information or to take certain measures, or to address certain items listed at a minimum, the Central Bank may impose requirements, which are additional to the list provided in the relevant article.

Application:

This Regulation applies to any person carrying out Hawala activity in the UAE.

Article 1: Definitions

The following terms and phrases shall have the definitions assigned to them for the purpose of this Regulation:

Central Bank: The Central Bank of the United Arab Emirates;
Central Bank Law: Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organization of Financial Institutions and Activities;
Hawala Activity: The arrangements for transfer and receipt of funds or equivalent value and settlement through trade and cash;
Hawala Provider Certificate: The certificate issued by the Central Bank for carrying on Hawala activity in the U.A.E;

Juridical Person: A juridical person in accordance with Article 92 of Federal Law No. 5 of 1985 Concerning the Issuance of the Civil Transactions Law as amended. For the purpose of this Regulation, this definition only refers to Juridical Persons in the UAE;

Registered Hawala Provider: Any natural person holding a valid residency visa or Juridical Person, who is registered in the Central Bank’s Hawala Providers Register in accordance with the provisions of this Regulation, including its agents or a network of agents;

Registered Hawala Provider’s Agent: Any natural or Juridical Person carrying out activity on behalf of a Registered Hawala Provider, whether by contract with or under the direction of the Registered Hawala Provider; and

Regulations: Any resolution, regulation, circular, rule, instruction, standard or notice issued by the Central Bank.

The terms mentioned in the Central Bank Law shall bear the same meanings ascribed thereto in the said Law when used in this Regulation, unless a definition otherwise is stated herein.

Article 2: Registration and Certificate Requirements

2-1 A resident natural person or a juridical person may not carry on Hawala activity in the UAE unless he holds a Hawala Provider Certificate issued by the Central Bank in accordance with the provisions of this Regulation.

2-2 Any natural person or juridical person may apply for registration and obtain a Hawala Provider Certificate. The said application shall be made on the Central Bank’s prescribed form for this purpose and be accompanied by the following documents:

a. A statement showing the nature and scope of the Hawala activity carried out by the applicant, in addition to any plans he may have for future business expansion, and details of the applicant’s arrangements for management of his business;

b. The applicant’s name, address, age and occupation, along with a true copy of his UAE ID card and/or passport, for natural persons, and a true copy of the commercial license for juridical persons;

c. An undertaking by the applicant:
i. to guarantee all transfers for its customers;
ii. that the Central Bank bears no responsibility whatsoever towards customer funds regardless of their value;
iii. to maintain an account with a bank operating in the UAE to be used for settlement and provide the Central Bank with details of such account;
iv. to abide, alike with its agents, by all UAE established laws, including civil laws, commercial companies’ law, federal laws on AML/CFT, and Central Bank Regulations;
v. to notify the competent authorities of the violation of said laws and Regulation;

vi. to make his records and documents available for examination by the Central Bank’s staff or any third party authorized to act on its behalf;

vii. to provide any information or documents the Central Bank may require for the purposes of deciding on the application for registration;

viii. to amend the license provided by the relevant economic department to reflect Hawala activity; and

ix. to install all security systems (alarm system/CCTV), in accordance with the relevant authority requirements and use authorized cash transit service providers for bulk currency transfers.

3-2 A Hawala Provider Certificate shall only be granted if the following conditions are met:

a. The applicant undertakes to provide the Central Bank, electronically via the Central Bank’s Remittance Reporting System and/or other applicable Central Bank system, with the data and information on remitters and beneficiaries required as per the forms prepared by the Central Bank for this purpose;

b. The applicant is not of UAE nationality and is legally competent and officially residing in the UAE;

c. The applicant is of good conduct and behavior and has not been convicted of any crime of honor or honesty and has not failed to honor his liabilities towards financial institutions or any other creditors. Furthermore, the applicant should not have been declared bankrupt nor reached a settlement agreement with his creditors or have his property confiscated or put under court receivership;

d. The applicant has a reasonable level of education, administrative, and professional experience.

Article 3: Notification of Approval/Rejection and Certificate Conditions

3-1 The Central Bank may agree or decline to issue a Hawala Provider Certificate.

3-2 In case of approval or rejection of the application for a Hawala Provider Certificate, the Central Bank shall notify the applicant in writing indicating reasons in case of rejection.

3-3 The Central Bank shall issue a Hawala Provider Certificate valid for one year, renewable for similar periods. The Central Bank may include in the Hawala Provider Certificate whatever terms and conditions it deems appropriate.

Article 4: On-Going Obligations of Registered Hawala Providers

4-1 A Registered Hawala Provider should strictly abide by the following:

a. Its commercial name should not include any financial activity term, such as bank, exchange house or any other licensed activity by the Central Bank (for juridical persons);

b. Manage his business personally and never assign such task to another person;

c. Not to change his address, place of residence/business, sponsor or commercial activity without obtaining the Central Bank’s approval;

d. Carry out his activity in suitable premises that enables the Central Bank’s staff to visit and examine his records;

e. Upload electronically to the Central Bank the details of all transfers, remitters and beneficiaries in the Central Bank’s prescribed systems on a daily basis;

f. Receive all applications for money value transfers as per official vouchers for each transaction. Such vouchers should be appropriately stored;

g. Verify identities of remitters and beneficiaries using Emirates ID or passports;

h. Deposit funds received from its customers in the account designated for settlement;

i. Submit to the Central Bank statements of his settlement account on a quarterly basis along with other required forms;

j. Provide the Central Bank with any data, information or statistics it may require at any time and for any specific period. Such data and information shall be regarded as confidential and shall be treated accordingly. A Registered Hawala Provider may not disclose such information except in accordance with the law;

k. A Registered Hawala Provider must exercise due diligence when approving an agent and provide the Central Bank a current list of its agents and the countries in which they operate;

l. Submit to the Central Bank an application for renewal of the Hawala Provider Certificate within a period not less than two months from the date of expiry of the original certificate or any renewals thereof; and

m. Abide, alike with its customers and agents, by all UAE laws, including civil laws, Commercial Companies’ Law, federal laws on AML/CFT, and Central Bank Regulations particularly with regard to notifying the competent authorities of any violation thereof.

Article 5: Specific Obligations with Regard to ML/FT Risks

5-1 In addition, a Hawala Provider registered in the Central Bank’s Hawala Providers Register must strictly comply with Decretal Federal Law No. (20) of 2018 on Anti-money Laundering and Countering the Financing of Terrorism and Illegal Organizations and its executive regulations, and any Regulations and directions issued by the Central Bank in this regard.

5-2 Hawala Providers may be guided by the Financial Action Task Force (FATF) Standards on anti-money laundering and countering the financing of terrorism and proliferation and to abide by guidance issued by the Central Bank in this regard.

Article 6: Supervision and Examination

6-1 The Central Bank shall have the right to examine the business of the Hawala Providers and their agents and customers whenever it deems appropriate to ensure proper implementation of the provisions of this Regulation.

Article 7: Enforcement and Sanctions

7-1 Violation of any provision of this Regulation may be subject to supervisory action as deemed appropriate by the Central Bank. In addition, without prejudice to other sanctions stated in any other laws in the UAE, the Central Bank may impose administrative and financial sanctions and penalties in accordance with the Central Bank Law and the Regulations issued in implementation thereof.

Article 8: Interpretation of the Provisions of the Regulation

8-1 The Regulatory Development Division of the Central Bank shall be the reference for interpretation of the provisions of this Regulation.

Article 9: Cancellation of Previous Resolutions

9-1 The Central Bank Board of Directors’ Resolution No 109/5/2002 regarding the preparation of a simple regulation for licensing and monitoring of Hawala intermediaries is cancelled.

9-2 This Regulation replaces "Hawala Intermediaries Regulation" issued on 2 July 2012.

Article 10: Publication and Application

10-1 This Regulation shall be published in the Official Gazette in both Arabic and English and shall come into effect one month from the date of publication.

Hareb Masood Al Darmaki
Chairman of the Board of Directors of Central Bank of the UAE

Registered Hawala Providers Regulation