4.13 Remittances Intermediate Account [Articles 9.1 (n) and (o) of the Regulations]

N 35/2018 STA

4.13.1“Designated Remittance Intermediate Account” with a Bank:
1. a)A Licensed Person who is in possession of a Category B or C license must maintain an account with a Bank licensed by the Central Bank of the UAE to be used exclusively as a “Designated Remittance Intermediate Account”;
2. b)The Licensed Person who conducts remittance business must deposit the funds received from its remittance customers directly into the “Designated Remittance Intermediate Account” before the end of banking hours on the next business day (i.e. the next business day following the day on which the funds were received); and
3. c)The Licensed Person must use the funds available in the “Designated Remittance Intermediate Account” solely for the purpose of settling the customers’ remittances with the foreign correspondents (i.e. correspondent banks, exchange houses, financial institutions or instant money transfer service providers).
4.13.2Accounting Treatment:
1. a)All outward remittance transactions must be initially recorded in a separate ledger account (in the General Ledger) titled as “Remittance Intermediate Account”;
2. b)The Remittance Intermediate Account must be a separate control account in the General Ledger. The Licensed Person may maintain multiple sub accounts (either currency wise, country wise or correspondent wise at the discretion of the Licensed Person) under the above stated control account;
3. c)Outward remittance transactions must be transferred to the respective ledger accounts of foreign correspondents (in the General Ledger) as and when the remittance instructions are issued (i.e. upon payment order transmission) to foreign correspondents;
4. d)The remittance instructions must be issued to foreign correspondents only after prefunding the account, if the settlement is on a prefund basis; and
5. e)An amount equal to the liabilities towards the remittance customers (i.e. the balance in the Remittance Intermediate Account in relation to unprocessed transactions) must be available at all times in the form of local currency, balances in the Designated Remittance Intermediate Account and foreign banks to cover the liabilities towards the remittance customers.
4.13.3Agreed-Upon Procedures (AUP) on the Remittance Intermediate Account:
1. a)External Auditors must perform Agreed-Upon Procedures (AUP) on the Remittance Intermediate Account and report their findings on a monthly basis to the Board of Directors (or to the Owner/Partners where there is no Board of Directors). Please refer to Appendix 6 for the minimum required Agreed-Upon Procedures to be performed by the External Auditor in this regard.
4.13.4Exception:
1. a)Standards related to the Remittance Intermediate Account are not applicable to remittance arrangements through instant money transfer service providers who do not require any prefunding by the Licensed Person to pay beneficiaries at the destination.