UAE Central Bank orders urgent probe into Banque Misr branches after US warning
The UAE Central Bank will conduct a "special and urgent examination" into the activities of Banque Misr's UAE branches after the US warned of money laundering concerns at the lender. The probe into the Egyptian lender will include "a forensic/in-depth lookback covering the period referred to in the statement issued by the US authorities, with a focus on banking transactions of the companies…
The UAE Central Bank has announced an urgent investigation into the operations of Banque Misr's branches in the UAE following a warning from the US authorities. The investigation, described as a forensic examination, will focus on the period mentioned in a statement released by the US authorities and will specifically target the banking transactions of the companies listed in the statement.
The US Department of the Treasury's Financial Crimes Enforcement Network has proposed a rule that would revoke Banque Misr UAE's access to correspondent banking services with US financial institutions due to money laundering concerns.
The UAE regulator stated that it reviewed the US authorities' statement and emphasized that Banque Misr branches in the UAE are subject to the local laws and regulations. The country currently has five Banque Misr branches, as per the bank's website. The Central Bank has warned that banks operating in the UAE should not expose the UAE's financial system to reputational risks, should respect the laws and regulations of the countries involved in the transactions, and must not misuse the UAE's advanced financial infrastructure.
The regulator also reiterated that it regularly examines the anti-money laundering and counter-terrorism financing (AML/CFT) procedures of banks operating in the UAE, verifying the effectiveness of sanctions screening and other systems, and requires banks to enhance these procedures. The Central Bank is currently evaluating the possible options regarding the bank's status if the special measure is imposed, in accordance with US laws.
The appropriate decision will be made in due course, taking into account the bank's obligations towards its customers in the UAE.
The UAE Central Bank has been actively enforcing its laws and regulations against financial entities that violate the country's rules. In June, a foreign bank's branch in the UAE was fined Dh20 million ($5.44 million) for breaking anti-money laundering rules, one of the largest financial penalties imposed to date.
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