Anti-Money Laundering Law in UAE – What Organizations Must Know?

UAE is a major business hub & trade location and many global investors have set up their companies in the region and are operating their businesses seamlessly. UAE is making all possible ways to reduce the complexities in opening a business in the region and offer hassle-free business support solutions.

Additionally, UAE is tightening the rules and regulations concerning anti-money laundering (AML) and Counter-Terrorism Financing (CTF). UAE is a global center for business and investors from all around the world come to UAE for doing business.

The Government is continuously improving the laws to effectively counter the risks of money laundering and terrorism financing.

New Guidelines from UAE Central Bank

UAE Central Bank has issued a set of guidelines to curb illegal business operations and illegal transactions.

The focus is on the real estate, precious metals, and stones sector specifically. The companies in UAE must conduct the appropriate levels of due diligence. The companies must report to the UAE’s Financial Intelligence Unit and report any suspicious activities.

These special sectors such as real estate. precious metal traders must appoint a compliance Officer and develop effective programs that will help to assess and control money laundering risks. The UAE Courts are imposing strict penalties in the money laundering case. The convicts are levied with heavy fines of AED 50 million and 15 years of imprisonment, etc.

UAE removed from the Grey List – Feb 2024 Update

UAE is removed from the Financial Action Task Force’s (FATF) list of “Jurisdictions under Increased Monitoring” or the “grey list”. It is a positive development for the country.

UAE’s efforts to combat Money Laundering and unauthorized financing were realized by the FAFT and its members. There will be further evaluation reviews and policy upgrades to strengthen the UAE’s commitments towards curbing any unaudited transactions originating or passing through the country.

Business Advantages for UAE

The removal of UAE from the Grey List of FATF results in many business advantages for the country

• Improved Reputation – It enables UAE to demonstrate its commitment to global Anti-Money Laundering policies. Also, it elevates UAE’s international reputation as one of the top business and finance hubs of the world.
• Easier Business Operations – Conduct international transactions more hassle-free with reduced regulatory compliance. This will in turn increase Foreign Direct Investments in the country.
• Enhanced Trust and Confidence – Increased confidence, reliability, and security for businesses, friendly business laws, reduced documentation, and more.
• Competitive Advantage – Gain a competitive advantage due to the reduced compliance requirements. More foreign investment in the form of various business registrations.

So, companies operating in the region must maintain high compliance standards and adhere to the Anti-Money Laundering Law and other financial compliances. It is the responsibility of all companies operating in the UAE to meet the international standards of financial compliance.

Scope of Anti Money Laundering Law in UAE

The Anti Money Laundering Law in UAE covers a lot of aspects related to illegal money transactions. There are various assessment reports related to money laundering in the field of trade, misuse of legal persons, non-profit organization, the gold sector, property handling, and more.

The UAE Central Bank has insisted all local and international banks operating in UAE maintain high levels of AML and CFT compliance and continue to impose fines in the event of non-compliance.

Anti-Money Laundering Platform

The Central Bank of UAE has launched the Anti-Money Laundering Platform ‘GoAML’. It is developed by the United Nations Office on Drugs and Crime (UNODC) to report and curb organized crimes.

All financial entities and Designated Non-Financial Businesses or Professions in UAE have to register in the system. The platform will prevent money laundering, terrorism funding, and other non-legal financial activities.

Fawri Tick – A Smart System to Prevent Financial Crimes

Fawri Tick is a smart system that collaborates with various federal and local authorities in UAE. The system will help in decision-making and facilitate faster communication. Using the system, the companies in UAE can respond effectively to financial crimes.

The System is in line with the National Strategy for Anti-money laundering and Countering Financing of Terrorism. All aspects related to money laundering, financing of terrorism, and illegal activities are covered under the ‘GoAML and the Fawri Tick System’.

Top Tips to Protect the Organization from Money Laundering

1. Ensure AML System Implementation

Get the ‘GoAML’ System for the organization and validate all the suppliers by checking their credentials using the software.

Depending on the business activity the ‘GoAML’ System must be used wisely by the company to avoid any illegal transactions or fraudulent activities.

2. Establish a Clear Technology Plan

There should not be any misalignment between the AML policies & procedures and organizational business strategies. The technology for detecting financial fraud must be implemented the right way.

The technology flow will enable the organization to conduct client identification, transaction monitoring, etc., and develop a risk assessment system.

3. Conduct Risk-based Due Diligence

Analyze the organizational data, monitor the behavior, trends, and transactions regularly. The regulatory authorities require firms to submit specific details about transactions and daily business operations.

4. Conduct Frequent Reviews

The organizations must conduct frequent reviews and audits to be clear about the accounts.

Any sort of illegal transaction must be reported to the authorities on time. The companies operating in UAE must be compliant with the AML Laws and all sorts of transactions must be recorded in books.

The Accounts team must conduct frequent audits to identify any illegal transactions in the system and report those to the authorities to avoid penalties.

5. Training for the Employees

Train the employees across the organization with the best security practices and ways to respond to unusual activities such as a faulty payment while detected.

Train the employees of all levels with the specific details of the products and services sold by the company. It will enable them to be informed about the activities and transactions recorded.

6. Ensure Adequate Resources are in place

Ensure the required systems for tracking the financial discrepancies are in place. An automated accounting software, AML Software, and other Fraud detection mechanisms must be in place.

Similarly, cyber security best practices and certification will help a long way in securing the organization from getting involved in any fraudulent transactions.

Guidelines for registration on goAML Platform

All companies registered in the UAE must comply with the Central bank’s guidelines on combating Money Laundering and Terrorism Financing. So, they must register in the goAML platform and screen their customers before initiating any business transactions with their customers.

Also, any suspicious transactions must be notified to the UAE Central bank authorities. The companies must follow the below steps to ensure they register on the goAML platform the right way.

Steps in Registering on goAML Platform

Gain access to the portal by login via the UAE Central Bank Services Page in their website. Further, choose the ‘Systems’ and select Live/Production from the drop down. Then, choose the option ‘ Register a new Organization’.

Provide all the required documents and fill in all the mandatory information about the company, shareholder details, etc. Update any incomplete information at this stage and submit for review.

Additionally, there are few supporting documents required for submission. Ensure the company has them all in place before starting the GoAML application filing. Submit the goAML application with the supporting documents and wait for the review. The investor will receive an email notifying the approval or rejection from the authorities.

Depending on the nature of business activities such as Brokers and Real Estate Agents, Dealers in Precious Metal and Precious Stones, Independent Accounts, etc. There are specific guidelines to follow and questionnaires to fill-in.

Aurion will guide our investors with the right way of filing the application on goAML platform. For any queries, please reach out to our expert Business Consultants.

Update from Ministry of Economy: GoAML Registration for Gold Trading Companies in UAE

Investors in the field of gold and precious metals trading fall under the designated non-financial businesses and professionals (DNFBP) category as per the Anti-Money Laundering Law in UAE.

Hence, companies having a Gold and Precious Metal Trading License must register for GoAML as well as prepare financial reports for submission yearly (if requested). As per the Federal Decree Law No (20) of 2018 and Article 20(2) of Cabinet Decision No (10) of 2019, it is mandatory to report suspicious transactions by the company to the respective authorities.

New companies that are registered in UAE and belong to the DNFBP category must register for the GoAML within 10 days of their incorporation to avoid any penalty from the authorities. Also, the new companies operating in the gold and precious metal trading category must report any suspicious transactions to the respective authorities through the GoAML portal.

The UAE Government takes stringent legal measures during the instance of any fraud detection or money mishandling. There are hefty fines and even imprisonment for company owners who indulge in any sort of illegal transactions or activities.

To safeguard your company from any financial misreporting or mismanagement, and register for ‘GoAML’, connect with our expert Business Consultants right away!

Contact Us: Aurion Business Consultants