Author: Nasir Salman
Introduction
In an increasingly interconnected world, combating financial crimes such as money laundering has taken centre stage in global regulatory initiatives. In alignment with these efforts, the United Arab Emirates (UAE) has established stringent anti-money laundering (AML) legislation to safeguard its financial system and bolster its reputation as a secure and reputable place to conduct business. As a chief legal officer at a leading Dubai-based law firm, I aim to shed light on these regulations and provide guidance on how companies can effectively navigate them.
AML Regulatory Landscape in the UAE
The UAE’s commitment to preventing money laundering is underpinned by several legislative instruments, primarily the Federal Law No. Among the relevant resolutions issued by the UAE Central Bank are the UAE Anti-Money Laundering and Combating Terrorist Financing Law of 2018, as well as relevant resolutions issued by the UAE Central Bank. In 2020, the UAE also introduced the Cabinet Decision No. 10 of 2019, which outlines controls to combat money laundering and terrorism financing. Together, these provide a comprehensive AML framework that aligns with the international standards set out by the Financial Action Task Force (FATF).
The Anti-Money Laundering Laws in Detail
A wide range of entities are subject to these laws, including banks, insurance companies, brokers, financial institutions, corporate service providers, and non-profit organizations, among others. They stipulate the establishment of internal controls, procedures, and policies to prevent and detect money laundering and terrorist financing. Key provisions include:
1- Customer Due Diligence (CDD)
Entities must verify the identity of their customers and, where applicable, the beneficial owner. For high-risk customers, Enhanced Due Diligence (EDD) procedures are required.
2- Risk Assessment
Entities are required to undertake an ongoing risk assessment, including documenting and updating the identification and assessment of risks associated with their products, services, customers, and geographic locations.
3- Record Keeping
Entities must retain documents and records related to customer identification and transactions for at least five years.
4- Suspicious Transaction Reporting
Entities must promptly report any suspicious transactions or activities to the UAE’s Financial Intelligence Unit (FIU) irrespective of the amount involved.
5- Training
Regular AML training must be conducted for employees so that they are aware of their responsibilities and obligations.
