What is the residual money laundering risk rating for the UAE banking sector?
The UAE second National Risk Assessment rates the banking sector residual ML risk as medium-high. Inherent risk is rated high, reflecting the sector size, customer base and cross-border reach, but control effectiveness is assessed as largely effective, which brings the residual rating down one band to medium-high.
The high inherent rating comes from what banks are exposed to rather than from how they behave. Banks deal with high-risk industries including real estate, dealers in precious stones, virtual assets and trade finance. They serve high-risk customers such as politically exposed persons, non-resident customers and customers dealing with high-risk jurisdictions. They also onboard through digital channels, provide cheque cashing facilities and offer payment processing.
The banking industry is described as exposed to money transport and cash controller networks, proxy networks, money mule networks, and digital money and virtual currency networks. More recently it has faced fraud typologies including impersonation fraud, business email compromise and pig butchering scams.
Legal Reference (source document):
· UAE Money Laundering and Terrorist Financing National Risk Assessment, 2nd NRA (2024)
· National Anti-Money Laundering and Combatting Financing of Terrorism and Financing of Illegal Organizations Committee
Scope note: this rating covers mainland and commercial free zone banking supervised by the Central Bank. DIFC and ADGM banking is rated separately.
Further reading: Building an effective AML/CFT framework
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