Insurance Firms Urged to Enforce Anti-money Laundering Rules
Issac JohnDUBAI — The UAE Government on Saturday asked companies in the insurance sector to enforce Anti-money Laundering, or AML, measures and warned that those who fail to comply with its move to combat financial crimes would be held accountable.
The National Insurance Authority, headed by UAE Economy Minister Sultan Al Mansouri, in a circular sent to insurance companies, outlined the measures and guidelines approved by the UAE Government to combat money laundering.
Fatima Mohammed Ishaq Al Awadhi, Deputy Director General of the National Insurance Authority, was quoted by the official government news agency Wam as saying that insurance firms and professionals related to the insurance industry would be held accountable in the event of “a money laundering crime committed by them or their company intentionally.”
In May 2009, the UAE approved new measures to combat money laundering and financing of militant groups subsequent to the original anti-money laundering law of 2002 that imposed restrictions on transfers and made the maximum penalty for money-laundering at seven years in jail and a Dh10 million fine.
“An offender in a money laundering crime, as defined by the law of 2002, is one who commits or assists in illegal money transaction activities. Offenders conceal and change sources of money gained through illegal ways to make them legal in order to finance terrorism and other criminal activities,” Al Awadhi said.
Instructions and measures stipulated in the UAE law would be applicable to all insurance companies, including foreign companies operating in the UAE, she warned.
Al Awadhi urged all players in the insurance industry to rectify their status as per regulations stipulated by the government within three months from the date of issue of the new circular.
The latest move of the National Insurance Authority is in line with a series of measures taken by the authority to streamline and upgrade the UAE insurance sector in line with international standards. One of the goals of the authority is to enable local insurance companies to implement the latest concepts in the global insurance industry to boost their competitiveness in the regional and international insurance markets.
Anti-money laundering authorities have warned insurance companies in the UAE and the rest of the GCC to be aware of money launderers who buy permanent life policies, annuity contracts and other insurance products that have a cash value and then redeem them before they reach maturity.
The UAE is one of the first countries that adopted Anti-Money Laundering Law.
In 2007, the UAE froze 17 bank accounts on suspected links to terrorism financing. The UAE Central Bank has so far frozen 259 accounts for suspected money laundering and other fraudulent activities, and referred them to the local courts.
According to the UAE Central Bank’s Banking Supervision and Examination Department, the number of suspected money-laundering transactions being reported by the UAE-based banks and financial firms was expected to increase by about 10 per cent this year compared to 2008 due to increased awareness of laundering methods.
In 2008, 13,101 “suspicious transaction reports,” or STRs were filed in the UAE, according to the Central Bank.