A Guide to Anti Money Laundering/ CFT Laws in UAE
A Guide to Anti Money Laundering/ CFT Laws in UAE: Money laundering and the financing of terrorism are crimes that threaten the security, stability and integrity of the global economic and financial system, and of society as a whole. The Anti-Money Laundering Law has been enacted to combat money laundering, terrorist financing and other related threats to the nation.
The principle AML/CFT legislation applicable is the Federal Decree-Law No. (20) of 2018 On Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organisations (the “AML-CFT Law” or “the Law”) and implementing regulation, Cabinet Decision No. (10) of 2019 Concerning the Implementing Regulation of Decree Law No. (20) of 2018 On Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations (the “AML-CFT Decision” or “the Cabinet Decision”).
What is DNFBPs in UAE AML Law
Companies carrying out the following trade or business activities are known as Designated Non financial Businesses and Professions (DNFBPs):
- Auditors and Accountants.
- Lawyers, notaries and other legal professionals and practitioners
- Company and trust service providers
- Dealers in precious metals and stones (DPMS)
- Real estate agents and brokers
- Any other Designated Non-Financial Businesses and Professions (DNFBPs) not mentioned above.
When do AML/CFT obligations apply to DPMS?
Under the AML-CFT Law and the AML-CFT Decision, DPMS are obliged to apply the required AML/CFT measures when they qualify as DNFBPs.
This occurs whenever they carry out any single transaction, or series of transactions that appear to be related, whose monetary value equals or exceeds AED 55,000.
This may include one or more transactions involving the same business relationship or customer, whether related to a single item or set of items; or it may also include one or more transactions which, in the judgment of the dealer, appear to be structured so as to avoid the established threshold.
Summary of AML/CFT obligations of DPMS
- Define Internal Policies, Controls, and Procedures
- Carry out KYC
- Submit STR
- Perform Enhanced Due Diligence
- Risk Profiling
- Record Keeping
- Repeat Process
Define internal policies, controls and procedures
Define and regularly update internal policies, controls, and procedures to mitigate ML/FT risks in accordance with the nature and size of business
Appointment of AML/CFT Compliance Officer
The AML/CFT compliance officer oversees the setting up of an effective compliance programme and oversees all the activities related to prevention of ML/TF
Responsibilities of Compliance Officer
- ML/FT Reporting
- AML/CFT Programme Management
- AML/CFT Training and Development
- Other Requirements
- Board of directors & senior management
- Spearhead the AML/CFT efforts and compliance
Employee’s personal and financial history to be thoroughly checked at the time of hiring and during the course of employment
Fines and Penalties
The Ministry of Economy has released a list of 26 penalties ranging from AED 50,000 to AED 1 million and can be doubled up to AED 5 million.