UAE FEDERAL ANTI–MONEY LAUNDERING FRAMEWORK
Money laundering is defined as any financial or banking transaction aimed at concealing or changing the identity of illegally obtained funds by passing them through the financial and banking system so as to make them appear to originate from legitimate sources and then reintroducing and investing them in a legal manner contrary to their real nature.
As a committed member, the United Arab Emirates (UAE) contributes to global Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) efforts and strives to fully implement the standards set by the international Financial Action Task Force (FATF).
Accordingly, Federal Decree-Law No. 20 of 2018 on Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organisations and its implementation regulation (AML Regulations) were issued in the UAE. Additionally, Cabinet Decision No. 10 of 2019, Concerning the Implementing Regulation of Decree Law No. 20 of 2018 on Anti-Money Laundering, has been adopted along with the AML Regulations guide.
UAE SUPERVISORY BODY
Pursuant to the AML Regulations, the Ministry of Economy (MoE) is the supervisory authority entrusted with the supervision of the Designated Non-financial Businesses and Professions (DNFBPs) sector at the state level and in commercial free zones with regard to AML/CFT.
The main objective of the MoE’s efforts in this area is to raise the level of compliance and commitment to international requirements and to preserve the position and status of the national economy and its good reputation in various global markets and among all partner countries and international organisations. The priorities during the next phase are based on providing all forms of awareness, advisory and training support possible to designated non-financial businesses and professions and raising their level of knowledge in order to be able to fulfil their obligations in partnership with various economic sectors.
The MoE has established a specialised department within its organisational structure, the Anti–Money Laundering Department, to follow up and implement its operational strategy with regard to awareness, control and inspection of all activities listed under the designated non-financial business and professions sectors in accordance with the provisions of the AML Regulations.
REPORTING ENTITIES UNDER AML REGULATIONS AND GOAML PLATFORM
The DNFBPs sector includes a wide range of non-financial areas and activities that are most exposed to the risks of money laundering and misuse of commercial transactions and the funds traded in them for the purposes of money laundering or other illegal practices given the nature of the services they provide or the products they deal with.
This falls in line with international standards issued by the FATF. The categories under these sectors have been divided according to the nature of activity in each sector as follows:
- brokers and real estate agents
- dealers in precious metals and gemstones
- independent accountants and auditors
- corporate service providers
- entities regulated by the Central Bank or other financial authorities
All DNFBPs are required to identify a nominated Compliance Officer/Money Laundering Reporting Officer (Nominated Person) in their firm. If an entity doesn’t have such an officer, then the managing director/COO/CFO of the firm can register in the goAML platform in order to be able to submit various types of informational reports, such as suspicious transaction reports (STRs), electronically to the UAE Financial Intelligence Department.
The administrative penalties relating to non-compliance by DNFBPs range from AED 50,000 up to AED 5 million.
WHAT ARE THE NEXT STEPS?
Companies falling under DNFBPs are required to register immediately in the goAML platform in accordance with the AML Regulations.
Please let us know whether you require any additional information or further advice on UAE Federal Anti–Money Laundering Framework–related concerns.
