Anti Money Laundering

The Central Bank of the UAE fined a financial company 4.8 million dirhams for violating legislation in the field of preventing money laundering

The reason for the Central Bank's recovery was the company's lack of a “risk analysis”, the necessary policy and diligence procedures to prevent money laundering and financial terrorism.

The Central Bank added that the administrative sanctions followed an appeals procedure, pursuant to Article 137 of the Decretal Federal Law No. (14) of 2018 regarding the Central Bank & Organization of Financial Institutions and Activities and Article 14 of the Federal Decree Law No. (20) of 2018 on Combating Money Laundering (AML) Crimes, the Financing of Terrorism and the Financing of Illegal Organizations.

According to the above regulations, this case is a serious violation. However, it is important to understand that this law does not apply to all organizations.

What you should know about AML?

AML:

• Applicable to institutions performing financial activities (banking services, receiving public deposits, providing credit facilities, currency exchange etc)
• Applicable to Designated Non-financial Business and Professions –DNGBPs (real estate agents, independent accountants & auditors, dealers in precious metals, corporate service providers)
• In relation to financial institutions & DNFBP requires to dentify and mitigate the risks by applying appropriate CDD & enhanced CDD measures.
• In relation to financial institutions & DNFBP requires to be diligent while dealing/transacting with people from high risk countries & politically exposed persons.
• In relation to applicable entities requires to report to the Finance Intelligence Unit of any suspicious activity through various reports like STR, SAR, HRC, HRCA etc.
• In relation to applicable entities requires to create and maintain adequate internal policies to comply with requirements of AML law.
• In relation to applicable entities requires to retain all records relating to the CDD measures applied for a period of 5 years.
• Administrative penalties range from 100,000 to 1 million AED and imprisonment.

The UAE government called on companies to adhere to the relevant legislation, apply the highest levels of compliance, and communicate with the concerned authorities if there are any inquiries. The monitoring and inspection campaigns were aimed at enhancing transparency in the business sectors. The Ministry strengthened measures to combat money laundering and financing of terrorism in the UAE to further improve regulatory compliance requirements.