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Navigating AML Compliance in the UAE
A Guide for DNFBPs
The United Arab Emirates (UAE) has cemented its position as a global hub for business and finance, drawing a wide range of industries with its modern regulatory framework and commitment to transparency. In recent years, stricter anti-money laundering (AML) regulations have been introduced to protect businesses and the financial system from exploitation.
Among the key players in this effort are Designated Non-Financial Businesses and Professions (DNFBPs), which play a vital role in combating financial crimes.
This article explains what it means to be classified as a DNFBP, outlines your obligations under UAE AML laws, and provides practical steps to ensure compliance while safeguarding your business from risks.
Among the key players in this effort are Designated Non-Financial Businesses and Professions (DNFBPs), which play a vital role in combating financial crimes.
This article explains what it means to be classified as a DNFBP, outlines your obligations under UAE AML laws, and provides practical steps to ensure compliance while safeguarding your business from risks.
Who Qualifies as a DNFBP?
According to Article 3 of Cabinet Decision No. 10/2019, certain professions and business activities are classified as DNFBPs and are subject to UAE’s AML/CFT regulations. These include:
Under Cabinet Resolution No. 58 of 2020, companies on the mainland and in non-financial free zones must maintain a beneficial ownership register to ensure transparency and disclose who ultimately controls the business. Compliance is mandatory and helps align your operations with UAE regulations.For businesses in financial free zones (e.g., ADGM and DIFC), separate rules apply, so consulting your free zone authority is essential.
Staying compliant with the UBO Resolution not only fulfills legal obligations but also protects your business from financial crime and regulatory risks. Ensure your Beneficial Ownership Register is up to date to stay ahead.
- Real estate brokers and agents involved in property transactions for their customers.
- Merchants of precious metals and stones handling cash operations of AED 55,000 or more.
- Legal professionals, such as lawyers, notaries, and accountants, managing activities like property transactions, fund or account management, company establishment, or the sale of commercial entities.
- Corporate service providers and trustees, engaging in activities like establishing companies, providing office addresses, or acting on behalf of trust or legal arrangements.
- Other professions and businesses designated by the Minister.
Under Cabinet Resolution No. 58 of 2020, companies on the mainland and in non-financial free zones must maintain a beneficial ownership register to ensure transparency and disclose who ultimately controls the business. Compliance is mandatory and helps align your operations with UAE regulations.For businesses in financial free zones (e.g., ADGM and DIFC), separate rules apply, so consulting your free zone authority is essential.
Staying compliant with the UBO Resolution not only fulfills legal obligations but also protects your business from financial crime and regulatory risks. Ensure your Beneficial Ownership Register is up to date to stay ahead.
Why AML Compliance is Crucial for DNFBPs
Designated Non-Financial Businesses and Professions (DNFBPs) play a critical role in preventing financial crimes by complying with UAE AML regulations. This compliance ensures transparency, reduces risks, and fosters trust among clients and stakeholders. As businesses operating at the intersection of financial and non-financial activities, DNFBPs are often targeted by money launderers and terrorist financiers, highlighting the importance of adhering to robust regulatory frameworks.
To counter these threats, the UAE has implemented strict regulations, including Federal Decree-Law No. 20/2018 on Combating Money Laundering Crimes and Cabinet Decision No. 10/2019
The UAE’s robust AML framework is a safeguard for your operations, helping you build resilience against financial crimes.
To counter these threats, the UAE has implemented strict regulations, including Federal Decree-Law No. 20/2018 on Combating Money Laundering Crimes and Cabinet Decision No. 10/2019
The UAE’s robust AML framework is a safeguard for your operations, helping you build resilience against financial crimes.
What happens if you don’t comply?
Non-compliance with AML obligations can lead to severe penalties, including:
Before facing fines and sanctions, take these critical steps to secure your business.
- Administrative Fines: Ranging from AED 50,000 to AED 5,000,000, as outlined in Cabinet Decision No. 16/2021.
- Operational Restrictions: Suspension, cancellation, or revocation of business licenses.
- Criminal Charges: Imprisonment and heavy fines for gross negligence or willful non-compliance.
Before facing fines and sanctions, take these critical steps to secure your business.
Steps for DNFBPs to Ensure Compliance
Here’s a step-by-step guide to building a solid foundation for compliance.
- 1
Registering with the Financial Intelligence Unit (FIU)
Your first step toward compliance is simple but critical: register on the goAML portal. This platform is your gateway to submitting Suspicious Transaction Reports (STRs) and staying in the loop with regulatory updates. - 2
Conducting Risk Assessments
Before you can mitigate risks, you need to identify them. DNFBPs are required to evaluate risks associated with their business, focusing on clients, geographical exposure, and transactional activities.
Regular reviews and updates are necessary to address evolving risks. - 3
Implementing Customer Due Diligence (CDD)
Verifying client identities isn’t just a formality—it’s a necessity. For high-risk clients, like politically exposed persons (PEPs), Enhanced Due Diligence (EDD) is mandatory.
By adopting robust CDD measures, you protect your business from being an unwitting accomplice to financial crimes. See the Supplemental Guidance for Auditors for more insights. - 4
Maintaining Comprehensive Records
According to the Article 24 of Cabinet Decision No. 10/2019 maintaining detailed records for at least five years is mandatory for DNFBPs and essential for regulatory audits and investigations. All transaction details, customer information, and risk assessments must be documented, as these records support compliance during audits and investigations. - 5
Transaction Monitoring and Sanctions Compliance
Monitoring transactions for unusual patterns is key to spotting potential red flags. Pair this with real-time updates from the Executive Office for Control and Non-Proliferation’s (EOCN) sanctions lists, and you’re well on your way to a robust compliance system. - 6
Appointing an AML Compliance Officer
Appointing a qualified AML compliance officer ensures accountability and oversight. Pair this with regular training for your staff, and you’ll create a culture of compliance that safeguards your business.
Achieving AML Compliance with Confidence
Compliance with AML regulations is crucial for DNFBPs in the UAE to mitigate risks and maintain operational integrity. To summarize, focusing on these essential actions will help your business meet its obligations effectively:
Assess Your Business Activities. Identify if your operations fall under DNFBP classifications as per UAE regulations.
Assess Your Business Activities. Identify if your operations fall under DNFBP classifications as per UAE regulations.
Develop a Risk-Based Framework. Tailor policies to address unique risks, from client onboarding to transaction monitoring.
Submit Reports on Time. Ensure timely filing of Suspicious Transaction Reports (STRs) and other compliance documents.
Submit Reports on Time. Ensure timely filing of Suspicious Transaction Reports (STRs) and other compliance documents.
Train and Monitor. Regularly train your staff and continuously update compliance measures to align with evolving risks and regulations.
Navigating AML requirements can be challenging, but with MDC Consulting, compliance becomes straightforward and stress-free. Our tailored solutions not only help you meet your legal obligations but also safeguard your business against financial and reputational risks.
Whether you need support with risk assessments, training, or implementing a robust compliance framework, our experts are here to ensure seamless integration with UAE regulations.
Whether you need support with risk assessments, training, or implementing a robust compliance framework, our experts are here to ensure seamless integration with UAE regulations.
Contact MDC Consulting today to build a strong foundation for AML compliance!
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