Comprehensive Guide to Anti-Money Laundering (AML) Laws in the UAE | 2024
Anti-Money Laundering (AML) is a critical effort to combat financial crimes and safeguard the economy. In the UAE, AML regulations and CFT guidelines empower supervisory Authorities to identify financial crime and mitigate risks effectively. These regulations are essential for combating money laundering and terrorism financing while ensuring compliance with best practices. DNFBPs play a significant role by adhering to principles that minimize exposure to financial crimes. The comprehensive AML Laws in the UAE are designed to address laundering and other crimes, creating a secure framework to protect businesses and individuals from risks in the financial system.
Structure
Key AML/CFT Laws and Regulations:
- The Federal Decree-Law No. (20) of 2018, later amended by Decree-Law No. (26) of 2021, focuses on Anti-Money Laundering, Combating Terrorism, and disrupting Illegal Organisations. It plays a key role in regulating and monitoring financial activities in the UAE.
- The Cabinet Decision No. (10) of 2019, supported by the Implementing Regulation, was further updated by the Cabinet Resolution No. (24) of 2022. These updates ensure stricter measures for Financing controls and compliance, reinforcing the UAE’s efforts to secure its financial system.
In Addition, Compliance with the Following Legislation is Required:
- The Cabinet Decision No. (109) of 2023 and the Cabinet Resolution No. (132) outline Beneficial Owner Procedures and Administrative Penalties for Violators. These measures ensure stricter Regulation and compliance with Terrorism Financing laws.
- The Unified List of Violations and Administrative Fines, introduced in 2021 under the Cabinet Decision No. (16), strengthens efforts to Combat Money Laundering and Terrorism Financing, supervised by the Ministry of Justice and Ministry of Economy.
- The Cabinet Resolution No. (74) of 2020 emphasizes countering Terrorist Financing, the Proliferation of Weapons of Mass Destruction, and implementing UN Security Council Resolutions to suppress and prevent global threats.
UAE Anti-Money Laundering Law
The UAE Anti-Money Laundering Law applies to banks, insurance companies, and financial institutions, as well as Designated Non-Financial Businesses and Professions (DNFBPs). Additionally, it includes Virtual Asset Services Providers (VASPs) to ensure compliance across industries. By targeting these sectors, the law not only aims to prevent illegal activities but also strengthens financial integrity.
- Precious Metals and Stones Dealers
- Real Estate Brokers and Agents
- Trust and Corporate Service Providers
- Independent Accountants and Auditors
- Legal Professionals including Lawyers and Notaries
Key AML Regulations Checklist in the UAE
Below is a checklist of the key AML/CFT obligations assigned to DNFBPs under UAE AML Laws:
- Appoint a qualified AML/CFT Compliance Officer to oversee AML compliance and reporting.
- Use the goAML Portal to file Suspicious Transactions and submit relevant reports.
- Implement strong controls, policies, and procedures to manage ML/FT risks and customers’ risk.
- Conduct an Enterprise Wide Risk Assessment (EWRA) and apply Enhanced Due Diligence for high-risk cases.
- Additionally, ensure compliance with Targeted Financial Sanctions (TFS) and retain records for at least 5 years.
AML regulations in the UAE require compliance with CFT laws, controls, and strict reporting processes.
Get Your Guide to Anti Money Laundering (AML) Laws in the UAE
Frequently Asked Questions
What is the primary goal of AML regulations in the UAE?
The main objective of AML regulations is not only to combat money laundering but also to prevent terrorism financing and safeguard the financial system’s integrity in the UAE.
Who needs to comply with AML laws in the UAE?
Additionally, Financial institutions, banks, insurance companies, DNFBPs (Designated Non-Financial Businesses and Professions), and VASPs (Virtual Asset Service Providers) are required to comply with AML laws.
What is the goAML Portal, and why is it important?
The goAML Portal is an online system designed for filing Suspicious Transaction Reports (STRs) and, furthermore, ensuring compliance with AML/CFT reporting requirements.
What are DNFBPs, and what do they include?
DNFBPs are Designated Non-Financial Businesses and Professions, including real estate agents, dealers in precious metals and stones, lawyers, accountants, and trust service providers.
How long should AML compliance records be kept?
You must retain AML compliance records for a minimum of five years, as per UAE regulations.
What does Enhanced Due Diligence (EDD) involve, and when do you apply it?
EDD involves applying additional scrutiny and measures to high-risk customers or transactions; consequently, it effectively manages risks.
What do Targeted Financial Sanctions (TFS) mean?
Additionally, TFS refers to specific financial restrictions imposed to counter terrorism financing and the proliferation of weapons of mass destruction.
What is the role of an AML/CFT Compliance Officer?
An AML/CFT Compliance Officer not only ensures adherence to AML regulations but also oversees risk management and, moreover, handles reporting requirements.
What penalties can violators of AML laws face in the UAE?
Additionally, violators may face administrative fines, legal actions, and reputational damage for non-compliance with AML laws and regulations.
How do AML laws align with international standards?
UAE’s AML laws follow global best practices, including compliance with FATF (Financial Action Task Force) guidelines and UN Security Council resolutions.
