United Arab Emirates:
Anti-Money Laundering And Compliance: The Latest Regulations
17 January 2023
BSA Ahmad Bin Hezeem & Associates LLP
To print this article, all you need is to be registered or login on Mondaq.com.
1. Introduction:
Throughout 2022, the United Arab Emirates (UAE) has reaffirmed
its ongoing commitment and efforts to strengthen its regulatory
framework in relation to anti-money laundering (AML) and counter
terrorist financing (CFT).
As a country that has become an important global financial
center for doing business, the UAE has reiterated its commitment in
working with the international community to combat financial crime
and remind businesses of their obligations in relation to
international sanctions programmes.
The latest updates to the UAE AML and sanctions laws regulations
were issued in 2021.
Throughout 2022, efforts were invested in ensuring proper
implementation of the latest changes and appropriate adaptation of
the programs that aim ensuring fulfilment of FATF
recommendations.
The principal AML/CFT legislation applicable remain to be:
- Federal Decree-Law No. (20) of 2018 On AML and CFT and
Financing of Illegal Organisations and implementing regulation
along with; - the Cabinet Decision No. (10) of 2019 Concerning the
Implementing Regulation of Decree Law No. (20) of 2018 On AML and
CFT and Illegal Organisations. - the Cabinet Resolution No. (24) of 2022 issued lately to amend
some provisions of the above Cabinet Decision.
The AML Law in the UAE requires Financial Institutions (FIs) and
Designated Non-Financial Business or Professions (DNFBPs)* to
establish a comprehensive AML/CFT Program including AML Policy for
KYC, Screening, Risk Profiling, Governance, STR Filing, and more.
The AML policy, procedures and guidelines have to be commensurate
with the nature and size of the business. The appointment of the
AML Compliance Officer has to ensure that the provisions of the UAE
AML Law are complied with.
To date, effective measures, and proactive regulatory action for
protecting the UAE’s regulatory and financial environment have
been implemented by the competent UAE authorities, including the
Central Bank of the UAE; Securities and Commodities Authority;
Ministry of Economy; Ministry of Justice; Abu Dhabi Global Market;
and the Dubai Financial Services Authority, as well as close
inter-agency cooperation.
These measures were mainly concerned this year on the
application of strict customer due diligence (CDD), ongoing
transaction monitoring, sanctions screening systems and the
importance of the subscription to the sanctions lists, suspicious
transaction reporting and GoAML registration, in addition to the
awareness on the targeted financial sanctions.
The Supervisory Authorities in the UAE continue to monitor the
evolving risk environment and remain agile in identifying emerging
risks and responding promptly by issuing necessary guidance,
spreading awareness and training webinars.
2. Legal & Regulatory updates from
2022:
| Legal & Regulatory Update 1: Circular Number No. (05) of 2022, issued by the Ministry of Economy (MOE) regarding the Real Estate Activity Report (REAR) submission by real estate brokers and agents and law firms. |
| The real estate sector is one of the main drivers of economic growth in the country. According to the results of the national risk assessment, this vital sector is one of the high-risk sectors. The Ministry of Economy has recently issued this circular in June |
|
What does this change? The main purpose of REAR is to curb the illicit investment in Payments for real estate transactions in the UAE through virtual Filing a REAR to report any transaction pertaining to freehold
|
| What is the impact / implications on businesses? This will enhance the sector’s ability to attract safe and These requirements will also provide all stakeholders with |
|
Will there be any further developments on this in This makes UAE one of the first countries to implement such a |
| Legal & Regulatory Update 2 |
|
As part of the CBUAE’s mandate to promote and protect the Within the CBUAE, the Regulatory Development Division is tasked |
|
What does this In 2022, the CBUAE has issued several guidance on AML and CFT on These guidelines and regulations will assist LFIs’ adhering |
|
What is the impact / implications on This will assist LFIs’ effective implementation of their |
|
Will there be any further developments CBUAE guidelines and regulations will ensure an adequate |
3. Thoughts & expectations for what is to come in
2023
The UAE’s commitment to advancing efforts to combat money
laundering and counter terrorist financing remains a key pillar
underpinning the country’s status as an attractive global
business hub that operates in line with international
standards.
Robust actions and ongoing measures taken by the UAE government
and private sector are in place to combat money laundering and more
specifically counter the proliferation financing in the upcoming
year.
The UAE has chosen to create a specific offence and implement
additional measures of proliferation financing including:
- Enhancing enforcement against proliferation and proliferation
financing. - Raising awareness and helping to clarify the obligations on
individuals, firms and FIs to be vigilant to proliferation and
proliferation financing. - Establishing a national definition of proliferation
financing. - Providing a basis for suspicious activity reporting.
In addition, the UAE has published a Control List that can be
found in Cabinet Decision No. 50 of 2020 implementing
internationally agreed dual-use goods subject to import and export
control. The list can be accessed through the EOCN website at https://www.uaeiec.gov.ae/en-us/control-list-good
Moreover, the United Nations Security Council (UNSC) has imposed
sanctions to prevent and counter the proliferation of Weapon of
Mass Destruction (WMD) and its financing, this includes targeted
financial sanctions against specific persons and entities that have
been identified as being connected to the proliferation of WMD. All
UN member states, the UAE included, are required to implement these
measures. Recommendation 7 of the Financial Action Task Force
(FATF) Standards requires countries to implement proliferation
related targeted financial sanctions (TFS) made under UNSC
Resolutions without delay.
Proliferation financing can contribute to global instability and
the UAE has proven its commitment and reiterate that combatting
money laundering, counter financial terrorism and proliferation
finance remains a strategic priority and goal.
We expect extra attention, awareness and requirements that will
be targeting the private sector this upcoming year concerning
proliferation financing and related reporting mechanism in order to
meet the regulatory reporting requirements.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
POPULAR ARTICLES ON: Finance and Banking from United Arab Emirates
KPMG in Cyprus
Many European fund managers have benefited from transition periods since the PRIIPs regulation was first introduced in 2018, but all things come eventually to an end: From 1 January 2023…
Dillon Eustace
We highlight below some of the key developments under EMIR which have occurred towards the end of 2022, including the implementation of the remaining aspects of the EMIR Refit proposals.
Finance Malta
On 7 October 2022, the European Parliament and Council approved a set of Technical Standards[1](the “Technical Standards”) supplementing the European Market Infrastructure Regulation[2] (“EMIR”).
postbrexitcompliance.com 