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4.17 Banknotes Import and Export from/to Foreign Institutions

N 35/2018 STA
  1. 4.17.1The Licensed Person must obtain a Letter of No Objection from the Banking Supervision Department for establishing relationship with any foreign institution for importing and/or exporting of banknotes;
  2. 4.17.2The Banking Supervision Department shall issue the Letter of No Objection based on the merit of each application from the Licensed Person provided that the following requirements are satisfied:
    1. a)Minimum paid-up capital of the Licensed Person and the bank guarantee favouring the Central Bank is:
      • •AED 50 million in case of Limited Liability Companies; and
      • •AED 10 million in other cases.
    2. b)The risk grading awarded to the Licensed Person by the Central Bank must be either Low or Medium.
  3. 4.17.3The Licensed Person must provide the following information/documents along with the application for the Letter of No Objection:
    • •The full legal name and address of the foreign institution;
    • •Draft copy of the bilateral agreement;
    • •Nature of the intended business, whether it is import or export of banknotes or both;
    • •Purpose of importing banknotes from the respective foreign institution;
    • •Source of banknotes exported to the respective foreign institution;
    • •Separate list of currencies to be imported and/or exported from/to the respective foreign institution and the projected annual value for each currency for next three (3) years;
    • •Expected number of shipments (separately for import and export) per year and projected value of each shipment in local currency for next three (3) years;
    • •Confirmation that the Enhanced Due Diligence has been carried out on the respective foreign institution; and
    • •List of similar existing arrangements and the current yearly volume and value of business in each currency for each entity.
  4. 4.17.4Import or export of banknotes must be made only from/to an institution which is a licensed financial institution from a well regulated jurisdiction;
  5. 4.17.5The Licensed Person must carry out the Enhanced Due Diligence, in accordance with Paragraph 16.11.2 of Chapter 16, on such foreign institutions before requesting for the Letter of No objection from the Banking Supervision Department;
  6. 4.17.6The Licensed Person must have appropriate agreements with such foreign institutions containing suitable clauses to cover all risks associated with importing and exporting of banknotes;
  7. 4.17.7The Licensed Person must complete the settlement for each shipment, whether import or export, within a period of seven (7) business days from the date of receiving/dispatching the shipment;
  8. 4.17.8The validity of the Letter of No Objection issued by the Banking Supervision Department is for a maximum period of three (3) years. The Central Bank reserves the right to restrict the validity of such Letter of No Objection for a period less than three (3) years depending on the risk grading of the Licensed Person; and
  9. 4.17.9The Central Bank reserves the right, if it deems appropriate, to restrict the use of imported banknotes to be sold via own branches of the Licensed Person to its retail customers and not for supplying to other Licensed Persons or Financial Institutions that are operating inside or outside the UAE.