Out-Law / Your Daily Need-To-Know

UAE introduces guidelines on anti-money laundering

Out-Law News | 22 Apr 2021 | 10:49 am | 1 min. read

The United Arab Emirates (UAE) has issued new guidelines on anti-money laundering (AML) and combatting the financing of terrorism (CFT) to raise awareness of the importance of adhering to financial crime legislation.

The National Anti Money Laundering and Combatting Financing of Terrorism and Financing of Illegal Organisations Committee (NAMLCFTC) adopted the guidelines for financial institutions, designated non-financial businesses and professions earlier in April.

The guidelines are set to be published on the NAMLCFTC and other regulatory bodies’ websites, to increase knowledge of the rules and ensure action by licensed entities.

The committee also approved six risk assessment reports related to terrorist financing, trade-based money laundering, misuse of legal persons, non-profit organisations, lawyers and the gold sector. The reports are aimed at aligning legislative and operational frameworks in the UAE, to enhance the understanding of the different type of risks and strengthen cooperation among regulatory authorities. The move is part of an ongoing focus within the UAE to tackle financial crime.

Expert in commercial disputes and investigations, Seema Bono of Pinsent Masons, the law firm behind Out-Law, said: “The Mutual Evaluation Report for the UAE was issued in April 2020 by the Financial Action Task Force and the Middle East and North Africa Financial Action Task Force.

“Since then and understandably so, the UAE has continued its strong commitment to improve AML and CFT compliance and these issues are very high on the national agenda. As part of this drive, in January 2021, the UAE Central Bank publicly announced that it had imposed financial sanctions on 11 UAE banks amounting to AED 45.76 million for failures to achieve appropriate levels of compliance regarding AML and sanctions compliance frameworks,” Bono said.

The Central Bank said all banks operating in the UAE had been allowed “ample time” to remedy any shortcomings. It has made it clear that it would continue to work closely with all financial institutions in the UAE to achieve and maintain high levels of AML and CFT compliance and will continue to impose further administrative or financial sanctions in the event of non-compliance.

In 2019 the Abu Dhabi Global Market updated its anti-money laundering rules to align them with federal legislation, with the new rules taking into account recommendations from the FATF, the inter-governmental body which overseas international measures to combat money laundering and terrorist financing.

More recently, the Dubai Financial Services Authority (DFSA) has shown an increased willingness to take action against money laundering and other crime, for example fining a firm over $600,000 last year for operating an illegal cash service.