WHAT IS THE ANTI-MONEY LAUNDERING (AML) & COUNTER TERRORIST FINANCING (CFT) PROCESS? WHAT DOES YOUR UAE COMPANY NEED TO KNOW & FOLLOW?
There are certain compliance formalities a UAE business will need to complete annually to comply with Anti-Money Laundering (AML) & Counter Terrorist Financing (CFT) processes. Depending on the nature of your business and the registered business activities goAML registration may apply.
WHAT ARE THE AML LAW & REGULATIONS?
Money laundering and terrorism financing are illegal activities that generate illicit money disguised as legal money worldwide. Therefore, countries have introduced anti-money laundering laws and anti-money laundering policy to fight money laundering. Federal Decree No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organizations is the key regulation of the UAE’s AML/CFT efforts. Cabinet Decision No. (10) of 2019 is the implementing regulation of the Federal Decree No. 20 of 2018.
The Anti-Money Laundering and Combating the Financing of Terrorism Supervision Department (AMLD) under the Central bank of UAE (CBUAE) is the enforcing authority of the UAE anti-money laundering laws and regulations and AML/CFT Guidelines 2021.
WHO REGULATES AML IN UAE?
The Central Bank of UAE (CBUAE) regulates AML in the UAE. Earlier, it was managed by a dedicated department – Banking Supervision Department. In 2020, CBUAE established the Anti-Money Laundering and Combating the Financing of Terrorism Supervision Department (AMLD).
WHEN DO AML/CFT OBLIGATIONS APPLY?
Under the AML-CFT Law and the AML-CFT Decision, AML/CFT measures apply when a business qualifies as Designated Non-financial Businesses and Professions (DNFBPs).
This occurs whenever DNFBPs conduct any single transaction, or series of transactions that appear to be related, whose monetary value equals or exceeds AED 55,000.
Any establishment that commits an offence of Money Laundering, Financing of Terrorism or Financing of Unlawful Organizations, shall be punished by a fine between AED 300,000 and AED 1,000,000
Failure to report a suspicious transaction shall be punishable by imprisonment and/or a fine of between AED 50,000 and AED 300,000.
COMPANIES CONDUCTING THE FOLLOWING TRADE OR BUSINESS ACTIVITIES ARE KNOWN AS DESIGNATED NON-FINANCIAL BUSINESSES AND PROFESSIONS (DNFBPS):
Auditors and accountants.
Lawyers, notaries and other legal professionals and practitioners.
Company and trust service providers.
Dealers in Precious Metals and Stones (DPMS).
Real estate agents and brokers.
Any other Designated Non-Financial Businesses and Professions (DNFBPs) not mentioned above.
WHAT IS goAML IN UAE?
The goAML is a software application used by the UAE Financial Intelligence Unit (FIU) to curb money laundering and terrorist financing. It is one of the United Nations Office on Drugs and Crime (UNODC) strategic responses to tackle financial crimes, including money laundering and terrorist financing.
goAML SYSTEM: ANTI MONEY LAUNDERING REGISTRATION UAE
Failure for a business or a DNFBPS to register on goAML UAE system may result in severe penalties invoked by the Ministry of Economy. The Ministry of Economy, initially set the date to register a DNFBPS in the goAML system by April 30, 2021. However, registrations are ongoing and are to be completed annual by the Ministry of Economy. goAML reporting requirements: Circular number: 08/AML/2021, with effect from 12 June 2021 describes the following procedures:
YEARLY AML/CTF RISK ASSESSMENT REPORT – DOES THIS APPLY TO MY UAE BUSINESS?
Yes, it is mandatory for a DNFBPS to file an annual AML/CTF risk assessment report and submit to the Ministry of Economy (MoE). In accordance with Article 44.4 1 of “Cabinet Decision No. (10) of 2019 Concerning the Implementing Regulations of Decree-Law No. (20) of 2018, on Countering Money Laundering and Terrorism Financing and Combatting Illegal Organizations”, all DNFBPs are required to provide the Ministry of Economy information yearly. Information regarding the business and its activities must be assessed to see how it conforms with AML laws and regulations, based on which the authorities provide entities a risk score. If a company provides incorrect information or lack of compliance a business can be penalized by the authorities. The information that authorities require include:
INHERENT RISK
The inherent risk part includes the key information such as:
Legal structure
Business activities
Ultimate Beneficiary details
Client records
Nature of transactions during the year
CONTROL & QUALITY OF RISK MITIGATION
Within this part it details how a business is applying AML-CTF controls, practices and documentation process including:
Process for risks assessment.
Details on how client records are maintained.
Protocols for how or when any potential risks detected are mitigated.
Does the business have policies and procedures in place to deal with such problems.
SIGNATORIES
This part includes the details of the person preparing and reviewing the report. It is important to ensure all Regulated reporting businesses within UAE apply appropriate and proper controls and measures to create and sustain a good compliance method.
TAKEAWAY
goAML registration is an annual mandatory requirement for any UAE entity that qualifies as Designated Non-financial Businesses and Professions. We urge you to reach out to your Creation Business Consultant for this service request to complete the process for your business. Failure to complete this compliance requirement for your UAE entity will likely incur fines. For a free consultation contact [email protected] or call +971 4 878 6240
Written by: Creation Business Consultants – Finance & Compliance Department
