UAE Recent AML Developments

The UAE has recently seen a high and growing level of enforcement measures taken by the regulator in the light of the FATF grey listing earlier this year.

Overview

The UAE has increasingly tightened measures against anti-money laundering and other financial crimes. In March this year the FATF was placing the UAE on its so-called grey list for increased AML monitoring.

Recently two new guidelines have published that highlights the expectation of the regulator.

Fines

The UAE’s anti-money laundering task force imposed fines of more than Dh41 million in the first six months of 2022, as it continues to rein in Money laundering.

The Executive Office of Anti-Money Laundering and Counter Terrorism Financing said the UAE had confiscated Dh2.33 billion ($634 million) last year in a purge on financial crime.

Also a Bank fined Dh19.5 million for not adhering to anti-money laundering rules.

More than that, the United Arab Emirates has issued a $1.4 million fine on an exchange house for not sufficiently following policy to prevent money laundering and financing terrorism. The Central Bank of the UAE has imposed financial sanctions on six unnamed banks. The region has seen a growing level of enforcement measures taken by the regulators in light of the Financial Action Task Force (FATF) in March this year placing the UAE on its so-called grey list for increased AML monitoring, and the industry’s reaction which followed.

Avoiding the Pitfalls

What the UAE regulator expects in terms of Transactions Monitoring & SAR/STR Reporting.
To avoid the Pitfalls we look here into what is expected in Terms of Transactions Monitoring and SAR/STR Reporting.

Transactions Monitoring

Required by Article 7 of the AML-CFT Decision, LFIs must continuously monitor all their transactions to ensure that the transactions conducted are consistent with the information they have about the customer, their type of activity and the risks they pose, including, when necessary, the source of funds.

As with all customer types, LFIs that use automated monitoring systems should apply rules with appropriate thresholds and parameters that are designed to detect common typologies for illicit behaviour.

When monitoring and evaluating transactions, the LFI should take into account all information that it has collected as part of CDD.

The transaction monitoring system used by LFIs should be equipped to identify patterns of activity that appear unusual and potentially suspicious for PEPs customers as well as unusual behaviour that may indicate that a customer’s business has changed in such a way as to require a high-risk rating.

Suspicious Transaction Reporting

As required by Article 15 of the AML-CFT Law and Article 17 of AML-CFT Decision, LFIs must file an STR/SAR with the UAE Financial Intelligence Unit (UAE FIU) when they have reasonable grounds to suspect that a transaction, attempted transaction, or funds constitute, in whole or in part, regardless of the amount, the proceeds of crime, are related to a crime, or are intended to be used in a crime.

STR filing is not simply a legal obligation; it is a critical element of the UAE’s effort to combat financial crime and protect the integrity of the financial system.

The Reason Why STR/SAR Reporting is Crucial?

As the STR filings assist law enforcement in detecting criminal actors and preventing the flow of illicit funds through the UAE financial system. Please consult also the CBUAE’s Guidance for Licensed Financial Institutions on Suspicious Transaction Reporting4 for further information.

How DX Compliance Can Help?

Transaction Monitoring is an important part of the AML Compliance program. Our system is designed for institutions in the UAE and beyond to comply with the law and avoid fines and save your reputation. Our transaction monitoring system is used by LFIs and equips them to identify patterns of activity that appear unusual and potentially suspicious for their customers as well as unusual behaviour.
As it is an all-in-one Platform you can also submit STR/SAR Reports directly from the Platform. Feel free to get in touch for a one-to-one Meeting and a Procut Demo.