Setup Business In UAE
Federal Decree-Law No. (20) of 2018 on Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organizations, and its Implementation Regulation was issued. It is the fundamental legal structure that criminalizes money laundering and terrorist funding activities and capitalizes on the legal and institutional framework’s efficacy in the implementation of procedures and interventions that help anti-money laundering efforts and fight the financing of terrorism and illegal organizations.
The UAE conducted its first national risk assessment on money laundering and terrorist funding in 2018, with broad participation from all relevant authorities. Money laundering and terrorist funding are high risks in a variety of regions, according to the assessment. FATF (Financial Action Task Force) reviewed the UAE in compliance with international standards in 2019 and discovered a range of areas that would benefit from a national structure to tackle money laundering and terrorist funding in order to grow further.
Institutional Framework for AML/CFT
In line with the UAE’s interest in and commitment to enforcing AML/CFT legislation, the ‘Higher Committee Overseeing National Strategy on Anti-Money Laundering and Countering the Financing of Terrorism’ was formed, headed by His Highness Sheikh Abdullah bin Zayed Al Nahyan, Minister of Foreign Affairs and International Cooperation. Through this strategy, 12 national strategic goals are to be implemented during the period from 2020-2023.
The Governor of the Central Bank chairs the NAMLCFTC, which was founded in the year 2000. It is in charge of the country’s strategies and efforts to tackle money laundering and terrorist financing.
Annual AML/CTF Risk Assessment Report
It is an obligation to file an annual AML/CTF risk assessment report to the Ministry of Economy (MoE) for all Designated non-financial businesses and Professionals.
According to Article (44) 1 of ‘Cabinet Decision No. (10) of 2019 Concerning the Implementing Regulations of Decree-Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations’, all DNFBPs are required to provide information as discussed below. This information request forms part of the Ministry of Economy’s efforts to apply a risk-based approach while executing its mandate as a Supervisory Authority of Designated Non-Financial Businesses or Professions. Moving forward, the Ministry of Economy will seek such information on an annual basis.
It consists of internal and external information of the business and its activities to assess how it is complying with AML laws and regulations, based on which the authorities give entities a risk score. Providing wrong information or lack of compliance is taken seriously and is likely to be penalized by the authorities. The information that needs to be provided can be divided into the following parts:
This section contains mainly the following type of information:
- Operational Activities
- Ultimate Beneficiary details
- Client records
- Nature of Transactions during the year
Control and Quality of Risk Mitigation
This section deals with how the entity is implementing AML-CTF controls and procedures and how are they documented, including:
- How are risks assessed?
- How are client records maintained?
- How any risks detected are mitigated?
- Are there appropriate policies and procedures in place to tackle such problems?
It includes the details of the person who prepares the report and the person who has reviewed it. As mentioned above, it is a yearly obligation, and therefore it is essential to make sure all Regulated reporting entities within UAE implement proper and robust controls and measures necessary to develop and maintain a sound compliance system with the organization.
The goAML System Registration
The Ministry of Economy (MoE) announced the launch of an awareness and monitoring campaign to enable registered Designated Non-Financial Business and Professions (DNFBPs) in the UAE to register with the Financial Intelligent Unit (goAML) system. Similarly, it encourages targeted groups to register in the system of the Committee on Goods Subject to Import and Export Control (Automatic Reporting System for Sanctions Lists), and to take action in relation to both the provisions of Federal Law No 20 of 2018 on the fight against money laundering crimes and the funding of terrorism and criminal organizations and the legislation and related decision-making rules and regulations.
According to the Ministry of Economy, last date to register in the goAML system was April 30, 2021. However, registrations are still being accepted by the MoE. Anti-Money Laundering (AML) violators may face administrative fines ranging from AED 50,000 to AED 1,000,000.
What is goAML System?
The goAML system is an integrated digital platform through which financial institutions, designated non-financial businesses and occupations, and the relevant authorities can send Suspicious Transaction Reports (STRs) and Suspicious Activity Reports (SARs). It is used by the Financial Intelligence Unit to collect, evaluate and distribute suspicious transaction information rapidly and effectively.
What is Committee for Commodities Subject to Import and Export Control (Automatic Reporting System for Sanctions Lists)?
By registering in this system, when an individual is included or excluded from the local list of targeted financial sanctions and the list of the UN Security Council and takes the required steps in compliance with the relevant decisions, the financial institutions and designated non-financial undertakings and professions will be able to obtain timely updates. This system receives automatic notifications via e-mail to all registered establishments and authorities.
Which Business are treated as Designated Non-financial Businesses and Professions (DNFBPs)?
A DNFBP is anyone who engages in the following trade or business activities:
- When brokers and real estate agents complete transactions for the benefit of their clients in the purchase and selling of real estate.
- Precious metals and precious stone dealers who carry out a single cash transaction or multiple cash transactions that tend to be connected or exceed more than AED 55,000.
- Attorneys, notaries, and other independent legal practitioners, as well as independent accountants, when planning, performing, or executing financial transactions for their clients:
- Purchase and sale of real estate.
- Management of funds owned by the Customer.
- Management of bank accounts, saving accounts or securities accounts.
- Organizing contributions for the establishment, operation or management of companies.
- Creating, operating or managing legal persons or Legal Arrangements.
- Selling and buying commercial entities.
- Providers of corporate services and trusts when they perform or execute a transaction on behalf of their customers in the following areas: Acting as an agent in the creation or establishment of legal persons;
- Working as or equipping another person to serve as director or secretary of a company, as a partner or in a similar position in a legal person.
- Providing a registered office, work address, residence, correspondence address or administrative address of a legal person or Legal Arrangement.
- Performing work or equipping another person to act as a trustee for a direct Trust or to perform a similar function in favour of another form of Legal Arrangement.
- Working or equipping another person to act as a nominal shareholder in favour of another person.
- Other professions and activities which shall be determined by a decision of the Minister
According to the Ministry of Economy, the targeted establishment must take three key measures to protect its enterprises against money laundering threats. As follows, the three steps are:
- Appointment of a facility compliance officer with responsibility for the registration and follow-up of the two systems;
- Exercising due diligence on customers by checking the identity of the client and the beneficial owner before forming a business relationship or opening an account and other information listed in the implementing regulations; and
- Registration in the ‘goAML’ system, filing of suspicious transaction reports through it, registration in the Automatic Reporting System For Sanctions Lists of the Committee for Commodities Subject to Import and Export Control, and alignment of their commercial operations with the lists produced on an ongoing basis by that system.
The Ministry of Economy (MoE) has stated that it will organize field inspection campaigns to track the scope of the dedication of the target establishments to the registration and implementation of relevant measures in both systems. Such initiatives will also help to raise awareness of the requirements of federal law and punishments for violations, and to ensure that they are committed to its provisions.
How can we help you?
The goAML system and the Automatic Reporting System for Sanctions Lists are two of the newest anti-money laundering programs introduced by the Ministry of Economy (MOE). According to the MOE, four classifications are required to register with the two systems: (1) Brokers and Real Estate Agents, (2) Dealers in Precious Metals and Precious Stones, (3) Auditors, and (4) Corporate Service Providers.
AAAC, never wants you to neglect in complying with the above-mentioned registration at ease. We are here to assist you with your registration. We will make sure to take care of your necessary documents regarding he registration and we will be happy to do it on our behalf.