UAE
United Arab Emirates
Guide to Compliance
Money laundering, terrorist and proliferation financing can destabilize communities, economic sectors, or national economies. Criminals and terrorist networks may be able to carry out their criminal and potentially destructive activities via a multitude of mechanisms and structures by transforming the proceeds of illicit activities into legitimate money.
The National Committee for Combating Money Laundering and the Financing of Terrorism and Illegal Organisations (NAMLCFTC) oversees the national risk assessment process. The UAE identifies and assesses the money laundering and terror financing risks it faces, in line with its obligations under the Financial Action Task Force Standards.
All financial entities and Designated Non-Financial Businesses or Professions (DNFBPs) have to develop and implement policies and procedures which create a risk-based approach framework to money laundering as well as perform the appropriate verification, name screening and other KYC checks to comply with the regulations. They must also register on anti-money laundering platform ‘goAML’ which is developed by the United Nations Office on Drugs and Crime (UNODC) to report and curb organised crimes.
As per article 2 of Federal Decree-law No. (20) of 2018 and Federal Law No. (7) of 2014 ,offences related to non-compliance with AML-CFT laws in the UAE will attract penalties up to AED 1 million.
Financial Institutions (FI)
Who are classified as FIs?
- Banks, finance companies, exchange houses, money service businesses (including hawaladar or other monetary value transfer services)
- Insurance companies, agencies, and brokers
- Securities and commodities brokers, dealers, advisors, investment managers
- Virtual asset service providers (VASPs)
What is required from FIs?
- Customer Identification
- Profiles
- Customer Acceptance
- Risk Rating
- Monitoring
- Investigation and Reporting
- Documentation
- Real time, Onboarding and Ongoing Screening against Sanctions lists, PEP lists , Adverse media list
- Identify and verify customer / beneficial owner/ intermediaries on below occasional transactions
1. In favour of a customer for amounts equal to or greater than AED 55,000 (or equivalent in any other currency).
2. Wire transfer equal to or exceeding AED 3500 (or equivalent in any other currency).
3. When there is ML/TF suspicion.
4. When there are doubts about veracity or adequacy of identification.
2. Wire transfer equal to or exceeding AED 3500 (or equivalent in any other currency).
3. When there is ML/TF suspicion.
4. When there are doubts about veracity or adequacy of identification.
Designated Non-financial Businesses
and Professions (DNFBPs)
Who are classified as DNFBPs?
- Auditors and accountants
- Lawyers, notaries and other legal professionals and practitioners
- Real estate agents and brokers
- Dealers in precious metals and precious stones (DPMS)
- Providers of corporate services and trusts
What is required from DNFBPs?
- Precious metals and precious stones dealers who carry out single or multiple covered transactions that equal AED 55,000
- Screening against Sanctions lists, PEP lists , Adverse media list
- Verify and identify true beneficial owner and corroborating legitimacy of source of funds
- Undertake risk based CDD measures when there is a suspicion of a crime
- Undertake risk based CDD measures when there are doubts about veracity or adequacy of identification
- Ongoing monitoring and Supervision of business relationship
- MVTS / NPO is properly licensed or registered
- Identify and report suspicious transactions to Finance Intelligence Unit (FIU)
- Record keeping and maintenance of client data and transactions
| Section in Federal Decree-law No.(20) of 2018 | Offence category | Penalty for each offence |
|---|---|---|
|
Article (22)
|
Transferring or converting proceeds or conducting any transaction with the aim of concealing or disguising their Illegal source.
|
Imprisonment for a maximum ten years and fine ranging from AED 100,000 to AED 5,000,000 or either one of these two penalties.
|
|
Article (22)
|
Abusing influence or the power granted by profession or professional activities
Crime is committed through non-profit organisation
Crime is committed through an organized crime group
|
Temporary imprisonment and fine ranging from AED 300,000 to AED 10,000,000
|
|
Article (24)
|
Violates on purpose or by gross negligence to report suspicious transaction or funds representing all or some proceeds, or suspicion of their relationship to the Crime
|
Imprisonment and a fine ranging from AED 100,000 to AED 1,000,000 or any of those two sanctions is applied.
|
|
Article ( 25)
|
Notifies or warns a person or reveals any transaction under review in relation to suspicious transactions or being investigated by the competent authorities
|
Imprisonment for a maximum 6 months and a penalty ranging from AED 100,000 to AED 500,000 or any of these two sanctions is applied.
|
FIs and DNFBPS that fail to abide with these rules shall be subject to various administrative and financial penalties. These penalties range from
- Auditors and accountants
- Lawyers, notaries and other legal professionals and practitioners
- Real estate agents and brokers
- Dealers in precious metals and precious stones (DPMS)
- Providers of corporate services and trusts
