On September 18th 2024, Dubai’s Virtual Asset Regulatory Authority shared a circular addressed to VASPs ( Virtual Asset Service Providers) in UAE requiring them to continuously updated their sanction alerts by registering to the Mandatory registration on the Executive Office for Control & Non-Proliferation [EOCN] system for sanction alerts.
According to the announcement, “VARA is mandated to assure market stability that is in turn contingent on every participant’s financial robustness and responsible market conduct – that collectively allow for the industry to operate on par with best-in-class international standards. The Executive Office for Control & Non-Proliferation [EOCN] was established in the United Arab Emirates in 2009 as the National Leader in the UAE to ensure the implementations of Targeted Financial Sanctions [TFS] imposed by the UAE, UN and FATF standards.”
The Terrorist Financial Sanctions, are aimed at denying certain individuals, groups, organizations, and entities the means to support terrorism or finance the proliferation of weapons of mass destruction; and ensuring no access to funds, financial assets or economic resources of any kind as long as they remain subject to the sanction’s measures.
As such VARA requires that VASPs and LoP holders to screen their user databases without delay [within 24 hours] each time the TFS list is updated to identify any matches against the latest list, and to ensure designated entities on the TFS list are immediately prevented access to funds owned or controlled, wholly or jointly, directly or indirectly, by the designated entity or to funds owned or controlled, wholly or jointly, directly or indirectly, by a person or organization acting on behalf or at the direction of the designated entity; and report any activity involving designated entities to the Financial Information Unit [FIU] in line with Rule III.F of VARA’s Compliance and Risk Management.
According to the regulator, VASPs failure to comply might lead to substantial criminal and civil penalties which could include suspension, restriction, or prohibition of activity business or profession and even revocation of operational license.
