The UAE Central Bank (CBUAE) has issued guidelines on anti-money laundering to Registered Hawala Providers (RHPs) and to Licensed Financial Institutions (LFIs) that provide services to them. The objective is straightforward: ensure both groups genuinely understand their statutory obligations under the UAE’s AML and counter-terrorism financing framework, not just acknowledge them on paper.
This guide covers the scope of the CBUAE hawala guidelines, how the hawala business model creates specific money laundering exposure, the core obligations imposed on Registered Hawala Providers, how this fits into the current UAE AML legal framework, and a worked compliance scenario.
Scope of the CBUAE AML and CFT Guidelines
The guideline applies to all licensed natural or legal persons under CBUAE supervision in the following categories:
- Registered Hawala Providers (RHPs)
- National banks and branches of foreign banks
- Exchange houses
Also check: AML Compliance Services
How the Hawala Business Model Works, and Why It Carries Real AML Risk
In the UAE, Registered Hawala Providers are supervised by the CBUAE, which examines their businesses, agents, and customers as it deems appropriate to confirm compliance with legal obligations. Hawala is a business built around transferring and receiving funds or equivalent value, settling transactions through trade and cash rather than exclusively through the formal banking system. What genuinely distinguishes hawala from other money transmission is its reliance on settlement methods beyond conventional banking, including trade-based settlement and long-term net settlement between hawala operators.
In the UAE, Registered Hawala Providers are only permitted to offer well-defined services, primarily non-commercial personal remittance and money transfer services supporting commercial operations. They aren’t permitted to accept deposits, exchange currencies, or buy or sell travelers’ cheques.
The hawala business exists to move money across borders efficiently for genuine customers, which is exactly the feature that makes it a potential avenue for money laundering if not properly supervised. Hawala providers also still rely on Licensed Financial Institutions to complete most international transfers, which means inadequate hawala-side controls can expose those financial institutions to money laundering risk as well, not just the hawala provider itself.
Must check: Ultimate Beneficial Ownership (UBO) Declaration
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
Core Obligations Imposed on Registered Hawala Providers
Under the CBUAE guideline, RHPs carry several specific obligations tied to Targeted Financial Sanctions (TFS) compliance under Cabinet Decision No. 74 of 2020:
Duty to Register for Sanction List Updates
RHPs must register on the Executive Office’s website to stay current on listings and delistings across both the United Nations Consolidated List and the UAE’s Local List, receiving automated notifications of changes.
Duty to Screen Customers Against the Sanction List
RHPs must screen customer names against the sanction list before sending or receiving money, and must also screen the recipient or sender on the other end of the transaction, the beneficial owner where the customer is a legal person, and the counterpart executing the transaction.
Duty to Freeze Funds of a Listed Person
Once a match on the sanction list is confirmed, RHPs must freeze the listed person’s funds within 24 hours, without notifying the person, and hold the funds pending release only to the UAE Government. Any transaction connected to the match must be suspended immediately, and records supporting the confirmation must be retained.
Duty to Report a Match to the Authorities
Any confirmed match must be reported to the Financial Intelligence Unit through the goAML platform, along with details of any action taken (such as freezing funds), within 2 business days of discovering the match.
How This Fits Into the Current UAE AML Framework
The TFS-specific obligations above sit within a broader AML/CFT legal structure that has itself evolved since this guideline was first issued. UAE AML/CFT obligations are currently governed by Federal Decree-Law No. 10 of 2025, effective 14 October 2025, with its implementing regulation set out in Cabinet Resolution No. 134 of 2025, effective 14 December 2025, replacing the earlier Federal Decree-Law No. 20 of 2018. Registered Hawala Providers, as licensed entities under CBUAE supervision, fall within the scope of this broader framework in addition to the TFS-specific duties described above, meaning general AML obligations, customer due diligence, suspicious activity reporting, and record-keeping, apply alongside the sanctions-screening duties this guideline focuses on specifically.
Worked Example: Screening, Match, and Response
A Registered Hawala Provider processes a routine remittance request. As required, the operator screens the sender’s name, the recipient’s name, and the beneficial owner details against the UN Consolidated List and the UAE Local List before proceeding. The screening returns a match against the recipient’s name. Within 24 hours of confirming the match, the operator freezes the funds without notifying the sender, suspends the transaction entirely, and documents the specific information used to confirm the match. Within 2 business days, the operator reports the match and the freezing action taken to the FIU through goAML. At no point does the operator inform the sender why the transaction was suspended, doing so would itself breach the “tipping off” restriction built into the freezing obligation.
Becoming a Registered Hawala Provider in the UAE
No natural or legal person may carry out hawala business in the UAE unless the Central Bank has issued a Hawala Provider Certificate and registered them in the CBUAE Hawala Provider Register. Any natural or legal resident officially based in the UAE, excluding UAE nationals, can apply for registration as a Registered Hawala Provider.
Frequently Asked Questions (FAQs)
Who does the CBUAE hawala AML guideline apply to?
How quickly must a Hawala Provider freeze funds after confirming a sanctions list match?
How quickly must a confirmed match be reported to the authorities?
Can a Hawala Provider accept deposits or exchange currencies in the UAE?
Does the broader UAE AML law apply to Hawala Providers beyond just sanctions screening?
Who can apply to become a Registered Hawala Provider in the UAE?
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
How Farahat & Co. Can Help
Farahat & Co., a trusted Auditors in UAE firm, supports Hawala Providers and Licensed Financial Institutions with AML compliance, TFS screening procedures, and registration guidance.
Contact Farahat & Co. today to discuss your Hawala Provider AML compliance requirements.
