UAE Central Bank Investigates Banque Misr

The Central Bank of the UAE is set to carry out an urgent investigation into the activities of Banque Misr’s branches in the country. This action follows concerns raised by the US regarding potential money laundering practices associated with the bank.

The inquiry will involve a detailed examination focused on the banking transactions of the companies named in the US authorities’ statement, reviewing the timeframe referenced in that notice, as confirmed by the Central Bank in a statement issued on Saturday.

On Friday, the US Department of the Treasury’s Financial Crimes Enforcement Network suggested a measure that could revoke Banque Misr UAE’s access to correspondent banking services with US financial institutions due to these money laundering concerns.

The UAE Central Bank indicated that it has assessed the statement from US authorities. They emphasized that Banque Misr’s branches in the UAE must adhere to the current laws and regulations of the country.

According to its website, Banque Misr operates five branches across the UAE.

The Central Bank expects licensed banks in the UAE to avoid exposing the nation’s financial system to reputational risks and to comply with the regulations of countries where they transact. It’s crucial that they do not misuse the country’s sophisticated financial infrastructure.

Additionally, the regulator highlighted that it routinely assesses anti-money laundering and counter-terrorism financing (AML/CFT) protocols at banks within the UAE. It also checks the effectiveness of systems designed for sanctions screening and mandates that banks improve these procedures as needed.

Furthermore, the Central Bank mentioned it is evaluating the possible implications for Banque Misr if any special measures are enacted after completing the necessary protocols outlined by US law. They will consider the bank’s commitments to its UAE customers when making this decision.

The regulator has been intensifying efforts against financial institutions that breach UAE regulations. For instance, in June, a foreign bank branch in the UAE faced a hefty fine of Dh20 million (approximately $5.44 million) for non-compliance with anti-money laundering regulations, marking one of the most significant penalties issued to date. The Central Bank reported that this branch had engaged in “significant, repeated failures” regarding its AML/CFT obligations and the governance of illegal organizations and sanctions.