Regulatory Focus - New AML Requirements for High-Value Dealers and Corporate Service Providers in the UAE - Are you ready?

In March 2021, the United Arab Emirates Ministry of Economy issued Cabinet Resolution No. (16) of 2021 in line with efforts to combat money laundering and terrorist financing. The Resolution lists twenty-six violations and corresponding fines.

The new requirements are targeted at Designated Non-Financial Businesses and Professions (DNFBPs) - brokers and real estate agents, dealers in precious metals and gemstones, auditors and corporate service providers - supervised by the Ministry of Economy.

• The fines for violations 1-3 are up to AED 1 million. Note that fines can be doubled up to AED 5 million under certain circumstances.
• The fines for violations 4-8 are up to AED 200,000.
• The fines for violations 9-16 are up to AED 100,000.
• The fines for the remaining violations are up to AED 50,000.

Details of the violations can be found at the end of this webpage.

If your firm is affected, you should already have registered on the Financial Intelligence Unit system (goAML) as well as on the Committee for Commodities Subject to Import and Export Control system (Automatic Reporting System for Sanctions Lists).

1. Dealing with fake banks in all ways.
2. Opening or maintaining bank accounts with fake names or numbers without the names of their owners.
3. Failure to take measures related to clients listed on international or domestic sanctions lists.
4. Failure to take enhanced due diligence measures to manage high risks.
5. Not notifying the Financial Intelligence Unit of a suspicious transaction report.
6. Failure to respond to the additional information request by the goAML system.
7. Tipping off the customer or others, directly or indirectly, when reporting or intending to report suspicions.
8. Failure to implement the measures set by the National Committee to Combat Money Laundering with regard to clients from highrisk countries.
9. Failure to take the necessary measures to determine the risks of crime in one’s field of work.
10. Failure to identify and assess risks relating to new services or new products offered by your firm.
11. Failure to take due diligence measures towards clients before establishing or continuing a business relationship.
12. Failure to verify the identity of the customer and the real beneficiary.
13. Delay in informing the goAML system of a suspicious transaction report.
14. Failure to apply due diligence measures towards politically exposed clients before establishing or continuing a business relationship.
15. Not creating records to keep track of financial transactions with clients.
16. Failure to take necessary measures and procedures to reduce the identified risks according to the results of the national risk assessment, or the results of the self assessment given the nature and volume of your firm’s work.
17. Failure to set internal policies, procedures and controls to combat crime or to avoid engaging in a suspicious business relationship.
18. Failure to take simplified due diligence measures to manage low risk.
19. Failure to take the necessary measures to understand the purpose and nature of the business relationship, or failure to seek to obtain information related to this purpose when needed.
20. Failure to take the necessary measures to understand the nature of the client’s business, the ownership structure of his business, and the extent of the client’s control over it.
21. Failure to take due diligence measures of continuous monitoring.
22. Failure to appoint a compliance officer.
23. Creating records for keeping financial transactions with clients in an irregular manner that does not allow for data analysis and tracking of financial operations.
24. Failure to keep records of financial transactions and documents for a period of five years.
25. Failure to provide information related to customer due diligence and continuous monitoring to the concerned authorities upon their request.
26. Failure to train employees countering money laundering and combating terrorism financing.

For a full list of violations please see the Ministry of Economy’s website.