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The United Arab Emirates (UAE) is dedicated to contributing to global anti-money laundering (AML) efforts as well as combatting terrorist financing (CFT), and is working hard to fully implement the standards set by the International Financial Action Task Force (FATF) in terms of AML compliance. The UAE performed its first national risk assessment for money laundering and terrorism funding in 2018. The study assisted the UAE government in identifying various locations with high risk of terrorism funding and money laundering. FATF analyzed and investigated the UAE in 2019 in light of international standards criteria, and discovered a number of areas that might benefit from a national framework for combatting terrorist funding and money laundering.

Federal Decree-Law No. (20) of 2018 on money laundering, terrorism funding, and unlawful organization financing, as well as its implementation regulation, was issued. It is a legislative framework that criminalizes terrorism financing and money laundering and capitalizes on the legal framework's effectiveness in the implementation of measures and procedures that contribute to efforts aimed at combating money laundering and financing of terrorist activities and illegal/banned organizations. This is accompanied by the demand for strong AML compliance in the UAE for all phases of money laundering. 

To comprehend the aforementioned regulation, it is necessary to first understand money laundering. Money laundering is any transaction aiming at altering or hiding the identity and source of money gained illegally, bypassing them via the banking and financial system as if they were from legitimate activities/sources, and then re-investing them.

The competent authorities in the UAE have built an institutional structure to monitor, collect, and manage information on all actions and operations that may lead to finance-related crimes, including terrorism funding and money laundering, in order to combat these crimes. The UAE authorities recognize that the national framework, as well as CFT/AML cooperation, must be further enhanced in order to increase its efficacy. Nadeem And Umendra Chartered Accountants have extensive expertise and experience in anti-money laundering compliance. In the UAE, we provide AML advisory services to a variety of Designated Non-Finance Businesses and Professions. We not only ensure that your company is fully compliant with AML requirements, but we also give extensive training to your employees so that they may also contribute to compliance.

The goal of the aforementioned legislation and national framework is to guarantee that the UAE is seen as a location where no one can carry out money laundering or terrorism funding operations. 

The UAE Federal Law on Anti-Money Laundering (AML) and Terrorist Financing (CTF) applies to both: 

Financial Institutions
Non-Financial Businesses and Professions (DNFBPs)

In other words, the MOE is in charge of establishing a robust system based on an equally strong regulatory framework in order to provide a safe and stable business environment for enterprises, organizations, and DNFBPs to operate in. 

In accordance with the requirements of the Federal Decree-law No. (20) of 2018 on AML And CFT and Financing Of Illegal Organizations and its related implementing regulation, the Ministry has established a separate department within its existing structure, called the Anti-Money Laundering Department, to implement its operational strategy of inspecting and controlling all operations listed under DNFBPs.

 

Procedures for Inspection 

The Ministry inspects DNFBPs in compliance with the regulations of the Financial Action Task Force (FATF) and international norms and practices. The ministry employs an off-site and on-site examination process. 

The following are summaries of inspection procedures: 

Sending a letter advising organizations of the inspection date and requirements. 
Beginning the process of onsite inspections and visiting entities in accordance with the set plan/schedule. 
Fill out the inspection forms based on what you discovered and observed during an inspection visit. 
Only if necessary, request more information or records from entities during or after the examination. 
Imposing sanctions on organizations deemed to be in violation of the AML/CFT legislation.