UAE tightens regulatory regime to combat money laundering

The UAE is working to­wards gearing up to inter­national regulatory stan­dards for Anti-Money Laundering / CFT Compliance Regime in order to provide global standards for existing and new in­vestors. In light of this the UAE has implemented the goAML system, which requires Designated Non-Financial Businesses and Professions (DNFBPs) established in the Mainland and Freezones to comply with Cabinet Decision No. (10) of 2019 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations (AML/CFT Law).

The UAE's implementation of this extended framework is in re­sponse to the financial action task force (FATF) Report on the UAE's compliance with international an­ti-money laundering (AML) stan­dards. The FATF is a body respon­sible for protecting the global financial system against illegiti­mate funds. In the report, the UAE was urged to take action to miti­gate any financial crime risks it faces arising from its status as a financial and investment hub.

The Cabinet Decision, there­fore, seeks to establish obligations on certain sectors that may be prone to illicit flow of funds. These sectors fall under the scope of DN­FBPs as defined in the AML Law. DNFBPs include certain activities such as the sale and purchase of real estate, dealers of gold and pre­cious metal sector, corporate ser­vice providers and independent accountants and lawyers.

Although these activities do not conduct the same activities as fi­nancial institutions, they perform certain transactions for their cus­tomers that may be used to con­ceal the identity of the source of funds behind each transaction.

In this context, the Ministry of Economy has encouraged DN­FBPs to register on the goAML platform portal and on the Com­mittee for Commodities Subject to Import and Export Control, which provides access to the Automatic Reporting System for Sanctions List. DNFBPs are urged to report any suspicious transactions on the goAML portal which shall be duly investigated by the UAE Financial Intelligence Unit.

The extended deadline to regis­ter on the two systems is March 31, 2021, failing which may result in the companies facing sanctions and administrative and financial penalties. The penalties range from mere warnings to finesranging from Dh50,000 to Dh5 million.

Both the Ministry of Economy and the freezones have taken pro­active steps to ensure that every entity falling under the scope of the AML Law have received suffi­cient time and guidance to take the necessary measures required to comply with the regulations. Therefore, it is imperative that en­tities falling under the scope of the Cabinet Decision expedite the reg­istration process on the goAML platform to avoid penalties and sanctions.

To know more as to how MBG can help you with regard to goAML registration as well as AML com­pliance, attend the Zoom webinar on March 18.

Sakina Dickenwala is director, legal advisory at MBG Corporate Services. She has rich experience in a wide range of aspects relating to commercial law, business restructuring, employment matters, developing ethics and compliance regulatory framework. 

Esha D' Souza is director, risk advisory at MBG Corporate Services. She has rich experience in internal audit, corporate governance, financial reporting, risk management, AML and fraud management and investigation.

For any queries regarding AML compliance, please get in touch with MBG Corporate Services at uae@mbgcorp.com / +971 52 6406240