UAE Central Bank To Take Regulatory Action If Pakistani Bank Found Violating Money Laundering Laws

Published February 19th, 2020 - 01:09 GMT
UAE Central Bank To Take Regulatory Action If Pakistani Bank Found Violating Money Laundering Laws
HBL admitted that weaknesses were found in its UAE operations in 2017 and later it initiated a business transformation programme which is now largely complete and has put new leadership in place. (Shutterstock)
Highlights
The central bank confirms that it has zero tolerance for non-compliance with AML legal requirements.

The UAE Central Bank on Wednesday said it is in close contact with Pakistan's central bank and will take appropriate regulatory actions against a Pakistani bank which has reportedly been founding violating the money laundering laws.

"We are in close contact with the home regulator of the Pakistani bank, the State Bank of Pakistan, and will take appropriate regulatory action once we have verified the findings reported in the media to confirm if there was any violation to UAE's Anti-Money Laundering and Combat of Financing of Terrorism (AML/CFT) laws and procedures," the UAE Central Bank said in the statement on Wednesday.

Earlier, State Bank of Pakistan, the country's central bank, had said in a finding that there were "significant irregularities" in Habib Bank Ltd's (HBL) dealing with politically exposed clients and screening some transactions in the Middle East. The inspection was carried out as part of the Financial Action Task Force (FATF).

HBL admitted that weaknesses were found in its UAE operations in 2017 and later it initiated a business transformation programme which is now largely complete and has put new leadership in place.

Bloomberg reported that HBL's UAE employees issued pay orders in their own names to help certain customers disguise transactions. The bank reportedly violated rules when opening an account of Duduzane Zuma, the son of South Africa's ex-President Jacob Zuma.

"In 2017, few weaknesses were identified at HBL UAE which contravened our processes and standards. This should never have happened. Over the last two years, we initiated a business transformation programme which is now largely complete. A new senior leadership team is in place. All staff has undertaken additional training as a reminder of our robust compliance and control processes and their responsibilities," the bank said in the statement.

In September, New York authorities had fined HBL for weak anti-money-laundering controls and sanctions compliance and ordered it to surrender its license.

HBL disclosed that it would complete the voluntary closure of its NY branch by March 31, 2020 ins coordination with New York State banking regulators.

"We believe this is material positive for the bank as this finally settles the dust over the threat of further punitive action from US regulators," Arif Habib Ltd said in a note.

"Central Bank of UAE expects high standards of Anti-Money Laundering (AML) compliance from all banks, including branches of foreign banks operating in the UAE. Central Bank confirms that it has zero tolerance for non-compliance with AML legal requirements," the UAE apex bank said on Wednesday.


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