Anti-Money Laundering Law in UAE – What Organizations Must Know?

UAE is a global center for business and investors from all around the world come to UAE for doing business. The country is tightening the rules and regulations concerning Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF). 

Additionally, UAE  is making all possible ways to reduce the complexities in opening a business in the region and offer hassle-free business support solutions. Also, the Government is continuously improving the laws to effectively counter the risks of money laundering and terrorism financing.

To curb the financial misrepresentation and unaccounted cash flows the UAE government has introduced the go AML Registration for certain selected businesses operating in the region. This article highlights the details of Anti Money Laundering Compliance in UAE and the requirements for Go AML Software System. 

Anti-Money Laundering Law in UAE

UAE has an Anti-Money Laundering Law in UAE [ Federal Decree Law No (20) of 2018]  in place. The law aims to combat money-laundering practices, establish a legal framework to support authorities to curb financial crimes, and counter the financing of suspicious organizations.

 Also, the Central Bank has issued a set of guidelines to curb illegal business operations and illegal transactions. The focus is on the real estate, precious metals, and stones sector specifically. 

The companies in UAE must conduct the appropriate levels of due diligence. The companies must report to the UAE’s Financial Intelligence Unit and report any suspicious activities.

These special sectors such as real estate. precious metal traders must appoint a compliance Officer and develop effective programs that will help to assess and control money laundering risks. 

The UAE Courts are imposing strict penalties in the money laundering case. The convicts are levied with heavy fines of AED 50 million and 15 years of imprisonment, etc.

The constant efforts to reduce money laundering have led UAE to get a removal from the Financial Action Task Force’s (FATF) list of “Jurisdictions under Increased Monitoring” or the “grey list”. It is a positive development for the country.

Anti Money Laundering Policy in UAE

So, now it is mandatory for companies falling under the ‘watch list’ category to implement an  Anti Money Laundering Software for checking the customer due-diligence.  This is a must-have as per the AML regulations stipulated by the UAE Government. 

Also, there must be a Government approved Software for checking AML compliance and conducting Anti Money Laundering Compliance Audits. These regulatory actions are essential in organizations, especially those that fall under the Designated Non Financial Businesses and Professions (DNFBP).

So, corporate service providers, accountants, lawyers, real estate agents, precious stone traders, etc., must comply with the anti money laundering policy in UAE. The Government will conduct further evaluation reviews and policy upgrades to strengthen the UAE’s commitments towards curbing any unaudited transactions originating or passing through the country.

Business Advantages for UAE – AML Compliance

The removal of the UAE from the Grey List of FATF results in many business advantages for the country. Also, for the companies operating in the region and newly registered companies will have a confidence boost to conduct business in the region hassle-free.

• Improved Reputation – It enables UAE to demonstrate its commitment to global Anti-Money Laundering policies. Also, it elevates UAE’s international reputation as one of the top business and finance hubs of the world.
• Easier Business Operations – Conduct international transactions more hassle-free with reduced regulatory compliance. This will in turn increase Foreign Direct Investments in the country.
• Enhanced Trust and Confidence – Increased confidence, reliability, and security for businesses, friendly business laws, reduced documentation, and more.
• Competitive Advantage – Gain a competitive advantage due to the reduced compliance requirements. More foreign investment in the form of various business registrations.

So, companies operating in the region must maintain high compliance standards and adhere to the Anti-Money Laundering Law and other financial compliances. It is the responsibility of all companies operating in the UAE to meet the international standards of financial compliance.

Scope of Anti Money Laundering Law in UAE

The Anti Money Laundering Law in UAE covers a lot of aspects related to illegal money transactions. There are various assessment reports related to money laundering in the field of trade, misuse of legal persons, non-profit organization, the gold sector, property handling, and more.

The UAE Central Bank has insisted all local and international banks operating in UAE maintain high levels of AML and CFT compliance and continue to impose fines in the event of non-compliance.

Anti-Money Laundering Software

The Central Bank of UAE has launched the Anti-Money Laundering Software System ‘GoAML’. It is developed by the United Nations Office on Drugs and Crime (UNODC) to report and curb organized crimes.

All financial entities and Designated Non-Financial Businesses or Professions in UAE have to register in the system. The platform will prevent money laundering, terrorism funding, and other non-legal financial activities.

Fawri Tick – A Smart System to Prevent Financial Crimes

Fawri Tick is a smart system that collaborates with various federal and local authorities in UAE. The system will help in decision-making and facilitate faster communication. Using the system, the companies in UAE can respond effectively to financial crimes.

The System is in line with the National Strategy for Anti-money laundering and Countering Financing of Terrorism. All aspects related to money laundering, financing of terrorism, and illegal activities are covered under the ‘GoAML and the Fawri Tick System’.

Top Tips to Protect the Organization from Money Laundering

There are few tips to protect the organization from Money Laundering and the most important point is the AML Software System Implementation.  Get the ‘GoAML’ System for the organization and validate all the suppliers by checking their credentials using the software.

Depending on the business activity the ‘GoAML’ Software System must be used wisely by the company to avoid any illegal transactions or fraudulent activities. Followed by that, establish a clear technology plan. 

AML Policies and Procedures

The AML policies & procedures must be in line with the organizational strategies. The company must invest in the AML Software System. Also, the technology flow will help the organization to conduct client identification, transaction monitoring, etc., and develop a risk assessment system.

The next important tip is to conduct frequent reviews and audits to be clear about the accounts. Any sort of illegal transaction must be reported to the authorities on time.

Compliance With AML Laws and Regulations

The companies operating in UAE must be compliant with the AML Laws and all sorts of transactions must be recorded in books. Employee training is another import aspect of maintaining AML Compliance for companies in UAE.

Organization must Train the employees across the organization with the best security practices and ways to respond to unusual activities such as a faulty payment while detected. Also, ensure there are systems for tracking the financial discrepancies. 

An automated accounting software, AML Software, and other Fraud detection mechanisms must be in place. Similarly, cyber security best practices and certification will help a long way in securing the organization from getting involved in any fraudulent transactions.

How to Register on goAML Software?

All companies registered in the UAE must comply with the Central bank’s guidelines on combating Money Laundering and Terrorism Financing. So, they must register in the goAML Software and screen their customers before initiating any business transactions with their customers.

Also, any suspicious transactions must be notified to the UAE Central bank authorities. The companies must follow the below steps to ensure they register on the goAML Software the right way.

Steps in Registering on goAML Software

Gain access to the portal by login via the UAE Central Bank Services Page in their website. Further, choose the ‘Systems’ and select Live/Production from the drop down. Then, choose the option ‘ Register a new Organization’.

Provide all the required documents and fill in all the mandatory information about the company, shareholder details, etc. Update any incomplete information at this stage and submit for review.

Go AML Software – Application Filing

Additionally, there are few supporting documents required for submission. Ensure the company has them all in place before starting the GoAML application filing.

Submit the goAML application with the supporting documents and wait for the review. The investor will receive an email notifying the approval or rejection from the authorities.

Depending on the nature of business activities such as Brokers and Real Estate Agents, Dealers in Precious Metal and Precious Stones, Independent Accounts, etc. There are specific guidelines to follow and questionnaires to fill-in.

Aurion will guide our investors with the right way of filing the application on goAML Software System. For any queries, please reach out to our expert Business Consultants.

Update from Ministry of Economy: GoAML Registration for Gold Trading Companies in UAE

Investors in the field of gold and precious metals trading fall under the designated non-financial businesses and professionals (DNFBP) category as per the Anti-Money Laundering Law in UAE.

Hence, companies having a Gold and Precious Metal Trading License must register for GoAML as well as prepare financial reports for submission yearly (if requested). As per the Federal Decree Law No (20) of 2018 and Article 20(2) of Cabinet Decision No (10) of 2019, it is mandatory to report suspicious transactions by the company to the respective authorities.

New companies that are registered in UAE and belong to the DNFBP category must register for the GoAML within 10 days of their incorporation to avoid any penalty from the authorities. Also, the new companies operating in the gold and precious metal trading category must report any suspicious transactions to the respective authorities through the GoAML portal.

The UAE Government takes stringent legal measures during the instance of any fraud detection or money mishandling. There are hefty fines and even imprisonment for company owners who indulge in any sort of illegal transactions or activities.

To safeguard your company from any financial misreporting or mismanagement, and register for ‘GoAML’, connect with our expert Business Consultants right away!

Contact Us: Aurion Business Consultants