UAE tightens regulatory regime to combat money laundering
Registration by March 31 on the UAE's goAML is mandatory for specified sectors and activities
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 firstname.lastname@example.org / +971 52 6406240
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