UAE Anti-money Laundering Efforts
As a dedicated member, the United Arab Emirates (UAE) contributes to global anti-money laundering efforts and fighting the financing of terrorism (AML/CFT), and struggles to fully implement the standards set by the International Financial Action Task Force (FATF).
Money laundering is any financial transaction aimed at concealing illegally obtained funds by passing them through the financial system to make them appear as originating from legitimate sources, and then reinvesting them in a legal manner differing from their real nature.
The UAE is a country in which criminals cannot carry out money laundering and terrorism financing operations, neither as a transit route to transfer proceeds originating from any criminal activity.
Financial Intelligence Unit
The UAE Financial Intelligence Unit (FIU) analyses suspicious transactions and activities that may involve money laundering, terrorism financing, and related criminal activities, on the basis of data and reports from financial institutions and designated non-financial business and professions (DNFBPs) who collaborate and share knowledge to detect and act against such activities.
The goAML system is an integrated system used by the Financial Intelligence Unit (FIU) to receive, analyze and distribute suspicious transaction reports (STRs) in a fast and efficient manner, and a large number of financial intelligence units worldwide are currently using it, and the United Arab Emirates is the first Gulf country to apply this modern system.
The goAML system has many advantages, including raising the operational level of the Financial Intelligence Unit (FIU) significantly, also at the level of the notifying institutions with the following:
- Fast sending suspicious transaction reports (STRs).
- Send suspicious transaction reports (STRs) in a more secure way.
- Receive information requests from the unit in an efficient and rapid manner.
- Reduce the cost of sending suspicious transaction reports (STRs).
Role of Financial Action Task Force (FATF)
It is an intergovernmental organization based in the French capital, Paris, founded in 1989. The Financial Action Task Force aims to combat currency counterfeiting and terrorist financing, and it has 37 members within the organization.
FATF recommendations set out a comprehensive and consistent framework. FATF recommendations set an international standard, which countries should implement by taking measures that have been adapted to their own circumstances.
The approach of the Ministry of Economy : (Risk-Based Control Approach)
Ministry of Economy is the supervisory authority delegated to supervise the ‘Designated Non-financial Businesses and Professions (DNFBPs) sector at the state level and commercial-free zones.
The DNFBPs sectors include a wide range of non-financial sectors and activities. The categories under these sectors have been divided according to the nature of activity in each sector, as follows:
- Brokers and real estate agents
- Dealers of precious metals and gemstones
- Independent accountants and auditors
- Corporate service providers
Circular No. 5/2021 Date 3/03/2021
Please note that failure to report suspicions of money laundering or terrorist financing is a criminal offense under the laws of the UAE.
If you do not complete the registration on the ‘goAML’ system by 31 March 2021, then the MOE will consider that the firm has contravened to put procedures in place for the reporting of the Suspicious Transactions.
Supervisory Authority for DNFBPs, may impose administrative penalties for any violation. Administrative penalties may include a financial penalty of AED 50,000 and no more than AED 5,000,000 for each violation.
Role of Pain Point Solutions:
- Registration with goAML
- Compliance Review