Money laundering is an increasing problem in the world, despite the legal authorities trying their absolute best to combat against crimes of these sorts. Just like any other country, the UAE maintains a strong Anti Money Laundering (AML) system in an effort to protect against the possibility of money laundering and terrorist financing.
If you’re not sure what Money Laundering is, it’s the process of changing large amounts of illegally obtained money into legitimate money by making the money go through a bunch of several different steps.
Anti Money Laundering (AML)
Since the early 2000s, the UAE Government has taken several steps to help monitor cash flows through the UAE financial system and to abide with international efforts to fight against terrorist financing. The UAE has passed two laws that serve as the foundation for the country’s Anti Money Laundering (AML) and counterterrorist financing (CTF) efforts namely: Law No 4/2002, the Anti Money Laundering law, and Law No. 1/2004, the counterterrorism law.
Even though the AML criminalizes money laundering, it doesn’t provide guidelines on how organizations are to monitor their financial activities. In this case, Regulation No 24/2000 comes in play which provides all the necessary guidelines on how organizations are to monitor the financial activities of their business.
Steps to abide with AML
The following guidelines are provided for organizations to abide with the AML and CTF.
- Customer Due Diligence – Organizations should properly follow CDD measures in place to verify the identity of their customers and ensure the nature of their business being legitimate. Customers who’re suspected of money laundering are subjected to go through enhanced due diligence measures (EDD).
- Transaction monitoring – Organizations should monitor closely monitor their customer’s transactions and accounts for activity that could indicate money laundering. For instance, transactions surpassing a certain threshold, suspicious transaction patterns or transactions involving high-risk countries.
- Compliance Officer – Internal AML programs should be overseen by Compliance Officer/Money Laundering Reporting Officer (MLRO), who has adequate amount of authority and expertise to carry out their duties effectively.
When firms detect suspicious activity, they should submit a Suspicious Activity Report (SAR) to the UAE Central Bank on their official website, and the Dubai Financial Services Authority (DFSA) via a Supervised Firm Contact Form (SFCF).
Who must abide with AML?
In the UAE, all organizations regulated by the Central Bank or other financial authorities are required to register in the goAML platform. This includes financial institutes under the Insurance Authority, the Securities and Commodities Authority, Dubai Financial Services Authority and Abu Dhabi Global Markets are required to register in the goAML system. However, the list of UAE entities that must register in the goAML system doesn’t end with the financial institutions. All the Designated Non-Financial Businesses and Professions (DNFBPs) such as Gold & other Precious Metal traders, Real Estate Agents, Corporate Service Providers and Auditors are also required to register in the goAML system.
