Sanctions on Iran, a historic trading partner of the UAE, have also meant that banks need to attend more closely to their local dealings. Mona Al Marzooqi / The National
Sanctions on Iran, a historic trading partner of the UAE, have also meant that banks need to attend more closely to their local dealings. Mona Al Marzooqi / The National

Region’s banks squeezed by compliance costs



Compliance costs for banks in the Middle East are soaring, as a global crackdown on money laundering and higher international capital requirements squeezes their resources, a new report from Thomson Reuters said.

Four out of five financial services companies in the Middle East polled by Reuters said that they expected compliance costs to rise over the next year.

Major regulatory changes are leading banks to take on more compliance staff, experts said.

They include the implementation of the US Dodd-Frank Act, a major legislative response to the 2008 subprime mortgage crisis, updates to the Foreign Account Tax Compliance Act, and a new global standard of risk management, the Basel III accords, that requires banks to hold more high-quality capital as a buffer against losses.

Greater enforcement of the Anti-Money Laundering Countering the Financing of Terrorism Act (AML-CFT), a US measure to ensure that bank funds do not end up in terrorists’ bank accounts, also means that the UAE’s banks must be particularly careful to scrutinise their international payment systems.

“These are increasing banks’ compliance costs by very large amounts,” said Nasser Saidi, the former Lebanese finance minister and former chief economist at the Dubai International Financial Centre.

“The trouble is that banks not only have to invest in resources and the human capital side, which is expensive, but you simply don’t have enough people with the right training in the region.”

Because UAE banks clear large volumes of trades in dollars through New York, they are forced to follow US rules – meaning that recent changes in America are hitting lenders here.

“A bank can become liable if suddenly the justice department determines that you have allowed payments for a non-US company that happens to be on a terrorist list,” said Mr Saidi. “This can be quite expensive.”

A legal precedent was set last September when a jury found Amman-based Arab Bank liable for damages in a New York court for providing financial assistance to Hamas. Arab Bank is appealing the verdict.

In the UAE, a tightening of Central Bank rules on lending has further created demand for trained compliance officers. Personal loans and mortgages have both been capped, while new technical measures for balance sheet and treasury management have made compliance officers' jobs more complicated.

“Stricter lending standards and new regulations in terms of retail loans have been introduced in the UAE,” said Jaap Meijer, an equities analyst at Arqaam Capital in Dubai.

“Capital management is now more sophisticated – requiring more frequent updates on liquidity and mismatch positions [differences in the maturities of securities held on a bank’s balance sheet].”

abouyamourn@thenational.ae

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The specs

Engine: 3.8-litre, twin-turbo V8

Transmission: seven-speed automatic

Power: 592bhp

Torque: 620Nm

Price: Dh980,000

On sale: now

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Business Insights
  • Canada and Mexico are significant energy suppliers to the US, providing the majority of oil and natural gas imports
  • The introduction of tariffs could hinder the US's clean energy initiatives by raising input costs for materials like nickel
  • US domestic suppliers might benefit from higher prices, but overall oil consumption is expected to decrease due to elevated costs
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
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Our legal consultant

Name: Dr Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

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TO A LAND UNKNOWN

Director: Mahdi Fleifel

Starring: Mahmoud Bakri, Aram Sabbah, Mohammad Alsurafa

Rating: 4.5/5

If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.

When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.

How to get there: Emirates currently flies from Dubai to Orlando five times a week.
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Also on December 7 to 9, the third edition of the Gulf Car Festival (www.gulfcarfestival.com) will take over Dubai Festival City Mall, a new venue for the event. Last year's festival brought together about 900 cars worth more than Dh300 million from across the Emirates and wider Gulf region – and that first figure is set to swell by several hundred this time around, with between 1,000 and 1,200 cars expected. The first day is themed around American muscle; the second centres on supercars, exotics, European cars and classics; and the final day will major in JDM (Japanese domestic market) cars, tuned vehicles and trucks. Individuals and car clubs can register their vehicles, although the festival isn’t all static displays, with stunt drifting, a rev battle, car pulls and a burnout competition.

THE%20SPECS
%3Cp%3EBattery%3A%2060kW%20lithium-ion%20phosphate%3Cbr%3EPower%3A%20Up%20to%20201bhp%3Cbr%3E0%20to%20100kph%3A%207.3%20seconds%3Cbr%3ERange%3A%20418km%3Cbr%3EPrice%3A%20From%20Dh149%2C900%3Cbr%3EAvailable%3A%20Now%3C%2Fp%3E%0A
Nayanthara: Beyond The Fairy Tale

Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni

Director: Amith Krishnan

Rating: 3.5/5

Iftar programme at the Sheikh Mohammed Centre for Cultural Understanding

Established in 1998, the Sheikh Mohammed Centre for Cultural Understanding was created with a vision to teach residents about the traditions and customs of the UAE. Its motto is ‘open doors, open minds’. All year-round, visitors can sign up for a traditional Emirati breakfast, lunch or dinner meal, as well as a range of walking tours, including ones to sites such as the Jumeirah Mosque or Al Fahidi Historical Neighbourhood.

Every year during Ramadan, an iftar programme is rolled out. This allows guests to break their fast with the centre’s presenters, visit a nearby mosque and observe their guides while they pray. These events last for about two hours and are open to the public, or can be booked for a private event.

Until the end of Ramadan, the iftar events take place from 7pm until 9pm, from Saturday to Thursday. Advanced booking is required.

For more details, email openminds@cultures.ae or visit www.cultures.ae

 

Business Insights
  • As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses. 
  • SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income. 
  • Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
Meydan Racecourse racecard:

6.30pm: The Madjani Stakes Listed (PA) | Dh175,000 1,900m

7.05pm: Maiden for 2-year-old fillies (TB) Dh165,000 1,400m

7.40pm: The Dubai Creek Mile Listed (TB) Dh265,000 1,600m

8.15pm: Maiden for 2-year-old colts (TB) Dh165,000 1,600m

8.50pm: The Entisar Listed (TB) Dh265,000 2,000m

9.25pm: Handicap (TB) Dh190,000 1,200m

10pm: Handicap (TB) Dh190,000 1,600m.

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North Pole stats

Distance covered: 160km

Temperature: -40°C

Weight of equipment: 45kg

Altitude (metres above sea level): 0

Terrain: Ice rock

South Pole stats

Distance covered: 130km

Temperature: -50°C

Weight of equipment: 50kg

Altitude (metres above sea level): 3,300

Terrain: Flat ice
 

Disclaimer

Director: Alfonso Cuaron 

Stars: Cate Blanchett, Kevin Kline, Lesley Manville 

Rating: 4/5

UAE - India ties

The UAE is India’s third-largest trade partner after the US and China

Annual bilateral trade between India and the UAE has crossed US$ 60 billion

The UAE is the fourth-largest exporter of crude oil for India

Indians comprise the largest community with 3.3 million residents in the UAE

Indian Prime Minister Narendra Modi first visited the UAE in August 2015

His visit on August 23-24 will be the third in four years

Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, visited India in February 2016

Sheikh Mohamed was the chief guest at India’s Republic Day celebrations in January 2017

Modi will visit Bahrain on August 24-25

Moon Music

Artist: Coldplay

Label: Parlophone/Atlantic

Number of tracks: 10

Rating: 3/5

Ticket prices
  • Golden circle - Dh995
  • Floor Standing - Dh495
  • Lower Bowl Platinum - Dh95
  • Lower Bowl premium - Dh795
  • Lower Bowl Plus - Dh695
  • Lower Bowl Standard- Dh595
  • Upper Bowl Premium - Dh395
  • Upper Bowl standard - Dh295
The biog

Nickname: Mama Nadia to children, staff and parents

Education: Bachelors degree in English Literature with Social work from UAE University

As a child: Kept sweets on the window sill for workers, set aside money to pay for education of needy families

Holidays: Spends most of her days off at Senses often with her family who describe the centre as part of their life too

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The specs
 
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
The biog

Favourite hobby: I love to sing but I don’t get to sing as much nowadays sadly.

Favourite book: Anything by Sidney Sheldon.

Favourite movie: The Exorcist 2. It is a big thing in our family to sit around together and watch horror movies, I love watching them.

Favourite holiday destination: The favourite place I have been to is Florence, it is a beautiful city. My dream though has always been to visit Cyprus, I really want to go there.

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