What you need to know.
What is AML law in UAE?
Anti-money laundering (AML) refers to the laws, regulations, and procedures that are put into place to prevent disguising illegally obtained funds as legitimate income, when it is not. Money-laundering investigations by law enforcement often involve scrutinizing financial records for inconsistencies or suspicious activity.
Criminal activities including market manipulation, trade in illegal goods, corruption of public funds, and tax evasion, as well as the methods used to conceal these crimes and the money derived from them, are targeted by AML laws and regulations.
The Central Bank of the UAE has established a special unit for investigating fraud and suspicious transactions known as the Financial Intelligence Unit (FIU) to protect the UAE economy, in collaboration with stakeholders, from risks of illegitimate activities such as money laundering and terrorism financing.
The data and reports sent by Financial Institutions (FIs) and designated non-financial businesses and professions (DNFBPs) who collaborate and share knowledge to detect and act against such activities go to a common database and becomes accessible to FIU of the country. The system permits electronic data collection, analysis, and dissemination to Law enforcement agencies and competent authorities.
Are you a DNFBP?
Defined in Article 3 of Cabinet Resolution No. 10 of 2019 Concerning the Implementation of the AML Law, Designated Non-Financial Businesses and Professions (DNFBPs) are those businesses/professions which are not in the finance or banking activities, but are prone to money laundering due to their nature. Some activities defined as DNFBPs are –
- Real Estate
- Dealers in precious stones and metals
- Trust and company service providers
- Accounting service providers
What do DNFBPs need to know?
The Ministry of Economy had made it mandatory for the Designated Non-Financial Businesses and Professions (DNFBPs) to register in the goAML system for which the deadline was on the 30th of April 2021. The fines for non-compliance start from AED 50,000 and can go up to AED 5 million, while the penalties for companies that fail to register could even lead to the revocation of the license or closure of the facility itself.
After the registration, you should also take the specified measures to ensure full compliance with the requirements of Federal Law No. 20 of 2018 on anti-money laundering, combating the financing of terrorism and illegal organizations, and their implementing regulations and relevant decisions. Follow-up measures after registration include setting up policies, procedures, and controls for AML to train employees so they’re fully aware of what is AML and what safeguards must be taken while carrying out company operations.
Many of the regulatory actions taken regarding AML are related to failings in systems and controls rather than laundering money or financing terrorism. AML must be a key component in your firm’s operations and must be kept under constant review to ensure that you remain compliant with the regulations and that you monitor your customer base on an ongoing basis.