MoE steps up AML drive, imposes fines on non-compliant firms

Issac John /Dubai Filed on August 17, 2021
Mohamed Al Janahi, Head of AML Supervision Section at the Ministry of Economy

Al Janahi urged the respective establishments to cooperate fully with inspectors and provide them with the proper regulatory requirements to ensure protection and avoid violations.

The Ministry of Economy (MoE) said on Tuesday that more than 80 per cent of the targeted Designated Non-Financial Businesses and Professions (DNFBPs) establishments have complied with the International Financial Action Task Force rules, while the rest 20 per cent or 3,083 non-compliant firms have been imposed fines of Dh50,000 each.

Addressing a press conference, Mohamed Al Janahi, head of Anti Money Laundering (AML) Supervision Section at the ministry, said the MoE’s efforts are directed towards meeting compliance in two main areas, which include the regulation and supervision of the DNFBPs to ensure they meet the legal requirements. The ministry oversees four main business activities including real estate agents and brokers, precious metals and gemstone dealers, auditors, and corporate service providers. A total of 15,000 establishments are operating within these activities and are under the supervision of the Ministry.

Al Janahi said the second aspect is obtaining the Ultimate Beneficial Owner (UBO) data from all private sector establishments within the country, including the non-financial free zones. This is being implemented in cooperation with Registrars of Companies across the country to ensure the completion and registration of UBO data from more than 565,000 private establishments operating in various sectors.

He said the number of DNFBPs identified as high-risk has reached 255 and they will be subject to a thorough and comprehensive onsite inspection. Medium and low risk entities will be subject to a remote inspection or ‘desk inspection.’ They will also be required to attend awareness seminars on the procedures to enhance their compliance levels.

Al Janahi urged the respective establishments to cooperate fully with inspectors and provide them with the proper regulatory requirements to ensure protection and avoid violations. If companies have been found violating the law, a review will be conducted to reach to a decision regarding the case.

Obaid AlMuhairi, AML and Terrorist Financing consultant said the MoE along with licensing authorities have achieved 93 per cent compliance rate of the total establishments.

Since July 1, 2021, the MoE and the Registrars of Companies have started implementing administrative penalties in three levels, catching entities which are violating the rules. “We have issued a total of 78,787 written warnings for first time violators which were determined through the review of the establishments' records with Registrars of Companies or through live inspection of the establishments' headquarters. The MoE and the Registrars of Companies have begun implementing the second level of administrative penalties since July 8, 2021. This includes the imposition of financial fines of Dh15,000 per violation of the entities. A total of 42,011 violations have been recorded, with the total value of the fines reaching Dh630 million,” said AlMuhairi.

He pointed out that for the third level, administrative penalties on establishments which still fail to comply will be fined double the amount, which is Dh30,000, within 15 days of non-compliance starting from the date of issuance of the second penalty imposed for not meeting the mentioned legal requirements.

He explained that companies found violating the regulatory requirements for combating money laundering through the UBO have the right to counter the case lodged against them and must provide valid reasons for the penalty imposed on them to be lifted. This will be reviewed by a grievance committee formed for this purpose by the Registrars of Companies, which make up a total of 40 relevant entities across the country. The system ensures there is greater flexibility and understanding to the needs of businesses, while also aiming to hasten the decision on grievance requests in accordance with best practices,” said AlMuhairi. —


Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.

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