It is the second time in two months the US treasury's spotlight has fallen on the country's financial system. Al Fida International General Trading, located in the same building in Dubai as Al Hilal Exchange, collaborated with Al Hilal Exchange to provide Bank Mellat with access to foreign currency, the statement said. The exchange was also designated for providing currency exchange services to Bank Melli Iran, which has been linked by international authorities to Iran's nuclear programme. In a statement last week, the US treasury department said Al Hilal Exchange provided foreign currency exchange services worth more than US$55 million to Bank Mellat, an Iranian bank. Measures taken against Al Hilal Exchange highlight the other pressing challenge facing exchange houses: keeping guard against illicit money flows in a region ensnared by sanctions and instability. "That can be to the benefit of customers as the cost of remitting money is very low compared to other countries." "It's a very competitive market as there's a large number of players," said Promoth Manghat, the vice president of global operations at UAE Exchange. With more than 130 exchange houses in the UAE, competition is intense and the profit margins of smaller players are often particularly squeezed. Industry representatives believe financial difficulties may be one of the sources of Asia Exchange's downfall. We want to ensure these cases do not affect the image of our industry," said Osama Al Rahma, the general manager of Al Fardan Exchange and chairman of the Foreign Exchange and Remittance Group, an association of more than 50 exchange houses. "In the future, we hope to know more about what happened with both exchange companies to use as a case study to improve standards. Every day, expatriates, locals and tourists use the network of more than 750 exchange house outlets to pay wages and bills, exchange currencies and send money home to their families. The events have shaken an industry responsible for pushing billions of dollars of funds every year through the financial system around the UAE and across the wider world. Then, last week, Al Hilal Exchange was sanctioned by the US treasury department for allegedly helping Iran attempt to circumvent global economic sanctions. In response to an investigation into complaints by Mr D'souza and other customers of Asia Exchange, the Central Bank earlier this month revoked the licence of Asia Exchange for "major regulatory violations".Īl Hilal Exchange, another exchange house, also had its licence revoked for the same reason and breaching anti-money laundering rules.
"They've now given us two other cheques for the amount but they're dated for November and December this year so it will have taken us more than a year to get the money back." "This shouldn't be allowed to happen," said Mr D'souza, the managing director. A cheque issued by Asia Exchange for the amount it owed was refused by Fortuna's bank because the signature was incorrect, said Mr D'souza. Nine months later and Sharjah-based Fortuna Engineering has still not been reimbursed. His investigation soon found the source of the problem lay with the currency exchange house his firm, Fortuna Engineering, used to distribute the wages.Īsia Exchange blamed the problem on a technical glitch and vowed to pay the company back the Dh30,800 it owed. In the case of one firm found to be in violation, Mark Denis D'souza first knew something was wrong when his staff contacted him to tell him they hadn't been paid their wages. Executives within the currency exchange industry and officials at the Central Bank are keen to bolster standards in the UAE to avoid the risk of a repeat of recent "major regulatory violations" and help restore customer faith in the sector.
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