The role of 'Designated Non-financial Businesses and Professionals' in fighting money laundering, financing of terrorism

Dubai - UAE Ministry of Economy has issued guidelines to assist them in better understanding and effective performance of legal obligations

The UAE is having the most liberal trade regimes that has aggressively expanded its financial services business, making it a global hub. As a committed member of the International Financial Action Task Force (FATF), the UAE has shown anticipation and a readiness for anti-money laundering and counter financing of terrorism (AML/CFT), and taken proactive steps to align itself with international best practices.

The UAE’s Ministry of Economy (MoE) is the supervisory authority entrusted with the supervision of Designated Non-financial Businesses and Professions (DNFBPs) and commercial free zones with regards to AML/CFT. The following trade or business activities are considered as DNFBPs:

1.Brokers and real estate agents

2.Dealers of precious metals and precious stones

3.Lawyers, notaries, and other independent legal professionals and independent accountants

4.Providers of corporate service and trusts

The MoE has also issued guidelines for each of the DNFBPs to assist them in better understanding and effective performance of legal obligations. Further, the ministry has established a specialised department, called the Anti-Money Laundering Department, in accordance with the provisions of Federal Decree Law No.20 of 2018 on anti-money laundering and combating the financing of terrorism and financing of illegal organisations, and its implementing regulation.

Accordingly, DNFBPs are having the following minimum statutory obligations:

1.Appointment of an AML/CFT compliance officer

2.Performing customer due diligence (CDD) measures

3.Suspicious transaction reporting (STR) to the Financial Intelligence Unit (FIU)

4.Subscription to the automatic reporting system (ARS) for sanctions lists

The deadline to register in the free goAML system to file STRs and ARS for sanctions lists is February 25, 2021, failing which may result in sanctions including licence suspension. This deadline is applicable for DNFBPs registered in mainland and free-zones as well. Now, the Ministry of Economy (MoE AML Team) has extended the deadline and grace period for registration is until March 31, 2021 for mainland DNFBPs but each free zone might come with a different deadline or grace period.

The goAML registration can be divided into following two steps:

1.Services access control management (SACM) and Securing the Secret Key

The SACM can be accessed via https://eservices.centralbank.ae/sacm

2.Registration stage in the goAML system

To fulfill the statutory obligation, DNFBPs should ensure that they have adequate internal policies, procedures, and controls in place, commensurate with the nature and size of their business.

DNFBPs that fail to abide with these rules shall be subject to various administrative and financial penalties. These penalties range from warnings to fines between Dh50,000 dirhams to Dh5 million.

Harikishan Rankawat and Chirag Gupta are partners of RNG Auditors. Views expressed are their own and do not reflect the publication's policy.