Money laundering and terrorism financing is a critical concern in present times, and it is crucial to combat such issues to safeguard the country’s economy. Hence, to fight these financial crimes, the United Arab Emirates has issued AML/CFT (Anti-Money Laundering / Countering the Financing of Terrorism) regulations supported by the detailed guidelines dictated by various administrative authorities. The AML policy UAE decrees the principles and best practices necessary to identify financial crime instances within companies and mitigate the risks associated with them.
In this comprehensive guide, we have shared all the details regarding UAE’s Anti-Money Laundering (AML) Laws and how to ensure AML compliance UAE.
Anti-Money Laundering (AML) Laws in the UAE
The Currency and Foreign Transactions Reporting Act in 1970 marks the beginning of the AML journey in the United Arab Emirates. Ever since, several key milestones have shaped this landscape. Initially, the AML laws in the UAE were managed through the Banking Supervision Department, which was later taken over by the Central Bank.
Understanding the AML laws and regulations in the UAE is crucial as it impacts both businesses and individuals in their day-to-day functioning. Despite constant efforts and robust measures taken by the UAE government, the risk persists within the nation. Thus, to mitigate vulnerabilities and potential financial crimes, the government enacted AML/CFT laws that focus on investigation, constant monitoring, and ongoing training to strengthen the framework and reinforce defense against financial crimes.
Strategic goals of UAE for AML/CFT
As part of their efforts to combat AML/CFT, the UAE government has set some strategic goals. These are –
- Continue learning new things and deepening the understanding of risk.
- Strengthen the National Committee for Anti-Money Laundering and Countering The Financing of Terrorism and Financing of Illegal Organizations standing within the AML policy UAE.
- Improve the efforts of law enforcement authorities in identifying and investing in Money Laundering cases.
- Use interim and confiscation measures prevalently and efficiently.
- Judge and act against Money Laundering effectively and apply fair and effective sanctions.
- Identify and seize unlicensed money transfer services effectively.
- Improve the efficiency of regulatory and managerial efforts for financial institutions and designated non-financial businesses and professions, emphasizing high-risk sectors and taking cautionary enforcement actions.
- Enhance execution of targeted financial agreements without delay.
- Arrange company registration agendas across the UAE.
- Strengthen the assistance programs’ links of the UAE with its international partners.
- Investigate, sue, and convict terrorism financing felonies effectively.
- Streamline the legal framework of the UAE.
AML Policy UAE
All financial institutions, banks, insurance companies, Designated Non-Financial Businesses and Professions (DNFBPs), and Virtual Asset service providers (VASPs) in the UAE are required to adhere to the AML law and ensure AML compliance UAE. The DNFBPs include: –
- Traders in precious Metals and Stones
- Real Estate Agents and Brokers
- Trust and Corporate Service Providers
- Independent Auditors & Accountants
- Lawyers, Notaries & Other Legal Professionals
AML Legal Framework and Authorities
The United Arab Emirates has taken a firm stand against Money Laundering and Financing of Terrorism by introducing a comprehensive legal framework for ML/FT and establishing multiple authorities to impose these regulations in various sectors and regions.
- Federal Decree-Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) outlines the laws and regulations for reporting entities, customer due diligence requirements, suspicion transaction reporting, AML officer appointment, and consequences for non-compliance.
- The regulatory authorities issued the guidelines and circulars related to AML/CFT regulations are the Central Bank of the UAE (CBUAE), the DFA (Dubai Financial Services Authority) of DIFC (Dubai International Financial Centre), and the FSRA (Financial Services Regulatory Authority) of the Abu Dhabi Global Market (ADGM).
- The AML/CFT framework crafted by the UAE follows the rules of the Financial Action Task Force (FATF) and aligns with international standards and conventions.
The AML/CFT legal framework in the UAE includes the following laws: –
- Federal Decree-Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations
- Federal Decree Law No. (34) of 2022 monitoring the legal profession and legal consultation profession.
- Federal Decree law No. (26) of 2021 (revising specific provisions of Federal Decree-law No. (20) of 2018)
- Cabinet Decision 10 of 2019 regarding the executive regulations for crimes of money laundering and terrorist financing
- Cabinet Decision No. (24) of 2022 amending Cabinet Decision No. (10) of 2019 Executive Regulations of Decree-Law No. (20) of 2018
- Cabinet Decision No. (74) of 2020 concerning the terrorist list system and the enactment of Security Council resolutions related to preventing and defeating terrorism and its financing
- Cabinet Resolution No. (16) of 2021 concerning the integrated list of violations and administrative fines imposed on violators of anti-money laundering measures
- Ministerial Decision No. (532) of 2019 concerning the establishment of the Anti-Money Laundering Department 2019
- Decision of the Minister of Justice No. 533 of 2019 concerning the procedures for combating money laundering and financing of terrorism for lawyers, notaries, and professionals
Supervisory and Reporting authorities for AML Policy UAE
Several AML/CFT regulatory authorities cover various regions and businesses across the UAE, such as –
The Ministry of Economy (MOE): Oversees all regulated entities operating on the mainland, except financial institutions that are administered by the Central Bank of the UAE.
The Central Bank of the UAE (CBUAE): The primary financial regulator that manages the financial institutions, banks, fintech, and other financial entities operating in the UAE Mainland. It creates and executes AML/CFT regulations for the financial sector.
Securities and Commodities Authority (SCA): Regulates UAE’s securities and commodities markets and issues AML/CFT guidelines and regulatory frameworks for the participants and for the VASPs (except in Dubai and ADGM).
Insurance Authority (IA): Supervises the insurance sector in the UAE and implements the AML/CFT framework for relevant companies and intermediaries operating in the country.
Financial Services Regulatory Authority (FSRA): Administers the Abu Dhabi Global Market (ADGM) and implements laws and regulations for the financial institutions and DNFBPs operating within the free zone to comply with the established AML/CFT regulatory framework.
Dubai Financial Services Authority (DFSA): Frames AML/CFT regulations and oversees financial institutions and DNFBPs operating in the DIFC (Dubai International Financial Centre), a financial Free Zone in Dubai.
Dubai Integrated Economic Zones Authority (DIEZ): Regulatory authority for IFZA (International Free Zone Authority) AML Compliance UAE.
Virtual Asset Regulatory Authority (VARA): Analyses the AML/CFT compliance of VASPs in Dubai (except DIFC).
The Ministry of Justice: Supervises lawyers and legal consultants in the UAE.
The Financial Intelligence Unit (FIU): Reporting authority for all suspicious activities related to money laundering and terrorism financing in the UAE.
Thus, all these authorities work together to ensure compliance with AML policy UAE and CFT regulations. They operate attentively to combat financial crimes and eliminate the troubles of ML/FT around the world.
Here’s how Shuraa’s expertise can help
Working with an audit and tax consultancy firm is the best way to ensure compliance with AML policy UAE. The experts of Shuraa Tax and Accounting Consultancy will ensure that your business follows the laws of DFSA, UN, and FATF. They track all transactions, analyze every single detail, and identify loopholes in the financial systems of the company. Moreover, they help incorporate a healthy culture within the organization so that its financial operations run without any disruptions caused by criminal activities such as money laundering and terrorism financing.
Join hands with Shuraa Tax and together fight against financial crimes in the UAE!
