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Hawala Operators to be Penalized

UAE Hawala Operators to be Penalized If Unregistered by December 2

The UAE Central Bank urged all Hawala service providers operating in the country to register officially. All non-registered Hawala providers are to obtain a certificate before the deadline, which is on December 2, 2020. This is in accordance with regulations related to the Registration of Hawala Providers

The regulations make sure only registered service providers that are carrying out Hawala-related activities in UAE are operating. This new mandate reflects the continuous efforts of the UAE Central Bank in making sure it is fully transparent with financial transactions. UAE local authorities also require full compliance to procedures in relation to the country’s efforts in combatting anti-money laundering, as well as the financing of terrorism.

Penalties to Noncompliant Hawala Providers

UAE Central Bank gave a warning to service providers that go beyond the grace period’s expiry. Legal action will be undertaken in accordance with effective penal provisions. Legal actions include banking law provisions which stipulate promotion or provision of Hawala activities even without being registered to Hawaladars Registry with the UAE Central Bank is considered an offense that is punishable by a fine or imprisonment. This is apart from the administrative closure of business premises wherein Hawala activities are being carried out. 

The Central Bank gave a warning on two violations which can result in either massive fines or jail sentence, which are as follows: 

  • Failure in being registered by the 2nd of December 2020; and 
  • Failure in complying with requirements as per regulation on Registered Hawala Providers.

The authorities are monitoring and auditing all relevant companies and their activities. UAE regulations on Registered Hawala Providers and Central Bank law provide powers to competent government departments in inspecting and examining every single area of a Hawala business. 

Requirements for Registration of Hawala Providers  

  • Application form complete with applicant details
  • Formal application letter with signature of authorized signatory 
  • Non-objection statement issued by shareholders pertaining to the application of a Hawala Provider Certificate from UAE Central Bank 
  • Commercial registration copy 
  • Tenancy agreement copy and address of business premises wherein the business is carrying out its activities
  • Memorandum of Association and Articles of Association (notarized)
  • Contact details for the manager in charge and the main office 
  • Registered Hawala Provider passport and ID card copy (applicable for renewal of registration)
  • Registered Hawala Provider’s personal photograph (colored and latest)
  • Registered Hawala Provider’s police clearance certificate 
  • Completed business introduction form 
  • Completed information form from the Central Bank 
  • Undertaking in opening a bank account wherein all transactions of the applicant has to be settled through, as well as details on Central Bank account
  • Undertaking in amending license provided by relevant economic regulators to reflect Hawala activity 

Hawala Registration Service in UAE  

At HHS Lawyers, our seasoned regulatory experts based in UAE can provide your business the quickest Hawala registration service. Our team of lawyers and legal consultants in UAE set a high standard in meeting strict deadlines in order to address the registration needs of our clients. Call us today!

Hassan Humaid Al Suwaidi., LL.B. is a Senior Partner in HHS Lawyers. He has 20 years of experience dealing with high-value and complex cases. Frequently featured in local and international legal directories and commended for his ability to attain favorable outcomes for clients, Hassan has been involved in some of the largest legal settlements. A major part of his work is providing expert legal advice on UAE legislation and acting for individuals and businesses during disputes and litigation. Read more