UAE: Up to Dh5 million fine for not complying with AML rules

The UAE’s Ministry of Economy has begun to implement inspection campaigns to ensure targeted firms’ compliance with the registration procedures in line with the anti-money laundering regulations seeking to curb illicit flow of funds and all forms of transnational financial crimes.

The launch of the inspection activity coincides with the expiry of a grace period up to April 30 given to establishments belonging to the Designated Non-Financial Businesses and Professions (DNFBP) category to register in the goAML system and Automatic Reporting System for Sanctions List. The ministry said punitive measures for violating the regulations or failure to register in the systems will come into effect from May 1, 2021.

The UAE passed an anti-money laundering and terrorism financing law in 2018. In February, 2021, the Ministry of Foreign Affairs and International Cooperation announced the launch of the ‘Executive Office to Combat Money Laundering and Terrorist Financing’ to implement the law.

The inspection campaign targets all categories of DNFBPs including brokers, real estate agents, auditors, dealers of precious metals and gemstones, and corporate service providers.

In addition to monitoring the level of commitment of DNFBP firms in registering themselves with the anti-money laundering systems, the inspection drive will also focus on monitoring their compliance with the other requirements of the Federal Law No. 20 of 2018 on anti-money laundering and combating the financing of terrorism and illegal organisations.

Safeya Al Safi, director of the Anti-Money Laundering Department at the Ministry of Economy, said the inspection move aims to ensure that the sector’s establishments follow the established regulations on anti-money laundering. She said the drive focuses on ensuring the integrity and transparency of commercial transactions within the DNFBPs sector, thereby addressing illegal and unsound financial practices and suspicious activities.

The MoE has appointed a new head of inspection campaigns to unleash a series of field visits and office inspections at DNFBP establishments to ensure their compliance with the measures and procedures stipulated by the law. Al Safi said compliance with the AML law will help improve UAE’s business environment. “This will positively impact the business sector by enhancing confidence in the UAE economy and increasing investment flows, spurring growth and recovery.

She underlined the need for companies to comply with the rules while speeding up registrations by taking advantage of the extension of the grace period.

The fines for violations start from Dh50,000 and go up to Dh5 million and could even lead to the revocation of the licence or the closure of the facility itself. The MoE will start enforcing penalties from May 1, 2021.

— issacjohn@khaleejtimes.com