ACCOSTAX

AML ( Anti Money Laundering ) in UAE

A guide to Anti Money Laundering AML Laws in UAE for 2021

Money laundering and the financing of terrorism are crimes that threaten the security, stability and integrity of the global economic and financial system, and of society as a whole. The Anti Money Laundering (AML) Laws in UAE have been enacted to combat money laundering, terrorist financing and other related threats to the nation.

The Latest UAE AML Regulations 2021 for AML Compliance in UAE

The principle AML/CFT legislation applicable is the Federal Decree-Law No. (20) of 2018 On Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organizations (the “AML-CFT Law” or “the Law”) and implementing regulation, Cabinet Decision No. (10) of 2019 Concerning the Implementing Regulation of Decree Law No. (20) of 2018 On Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations (the “AML-CFT Decision” or “the Cabinet Decision”).

Legal requirements as per Anti-Money Laundering Law in UAE

The Anti-Money Laundering Law in UAE requires the FIs and DNFBPs to establish a comprehensive AML/CFT Program including AML Policy for KYC, Screening, Risk Profiling, Governance, STR Filing, and more. The AML Law in UAE requires that the Anti-Money Laundering Policy and AML procedures and guidelines have to be commensurate with the nature and size of the business. The AML Compliance Officer has to ensure that the provisions of the UAE AML Law are complied with.

What is goAML in UAE?

The goAML is a software application used by the UAE’s Financial Intelligence Unit (FIU) to curb money laundering and terrorist financing. It is one of the UNODC’s strategic responses to money laundering and terrorist financing.

The goAML portal takes care of data collection, management, analytical, document management, workflow, and statistical needs of the UAE’s Financial Intelligence Unit. The goAML portal is used by the UAE’s FIU to gather information and data about suspicious transactions involving money laundering and terrorism financing.

Who should register with goAML system in UAE?

In order to curb financial crimes, some businesses in the UAE are required to perform anti-money laundering registration. goAML Dubai is a state-of-the-art platform utilized by regulated entities in Dubai to fight money laundering and ensure regulatory compliance. The regulated organizations subject to AML regulations in the UAE are required to carry out goAML reporting, including Suspicious Activity Report (SAR) and Suspicious Transaction Report (STR), to the FIU and the regulatory authorities.

Accordingly, all the following AML-regulated organizations must register on the UAE FIU’s goAML Portal:

Financial Institutions

Virtual Asset Service Providers (VASPs)

Designated Non-Financial Businesses and Professions (DNFBPs)

Dealers in Precious Metals and Stones

Real Estate Agents and Brokers

Trust and Corporate Service Providers

Lawyers, Notaries, and independent legal professionals

Independent Accountants and Auditors

"How Accostax can helps you"

AML/CFT Policy, Controls, and Procedures Documentation

An AML/CFT Policies and Procedures manual is a formal document outlining the rules and steps organizations take to follow anti-money laundering (AML) and countering the financing of terrorism (CFT) laws. Senior management approves this manual, which is then shared with compliance staff, auditors, and regulatory authorities to ensure everyone stays updated on legal requirements.

Given the increasing risks of money laundering and terrorism financing in the UAE, organizations must protect their integrity and reputation. That's why we offer AML/CFT policy, controls, and procedures documentation services. By implementing these measures, organizations can remain compliant with UAE's AML laws and safeguard against potential risks.

To steer clear of AML risks and penalties, UAE organizations need robust policies and procedures to detect and prevent money laundering and terrorism financing activities. Our services help them establish and maintain effective AML/CFT rules and control systems to mitigate these risks throughout their operations.

AML training

Our AML/CFT compliance programs encompass comprehensive AML training for employees, highlighting the critical role of AML in their daily business operations. It's essential for organizations to provide relevant AML compliance training to clarify employees' roles and responsibilities within AML frameworks. This training equips employees to identify suspicious transactions, conduct customer identification, assess risks specific to their business, and grasp the implications of relevant regulations. In the UAE, organizations are mandated to maintain and implement AML and CFT Policies to comply with various regulations and laws. AML training is a crucial obligation for regulated entities. Given the evolving risk landscape associated with money laundering and terrorist financing activities, these laws and guidelines undergo frequent updates. Consequently, companies tailor their AML and CFT programs to ensure compliance with laws and regulations at all times.

Annual AML / CFT risk assessment report

Designated Non-Financial Businesses and Professions in UAE must file an annual AML/CFT Risk Assessment Report with the Ministry of Economic (MOE), UAE. Pursuant 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', DNFBPS in UAE are required to file annual AML/CFT Report.

Managed KYC and customer due diligence services

We specialize in providing managed Know Your Customer (KYC) and Customer Due Diligence (CDD) Services tailored to ensure your compliance with AML regulatory requirements while optimizing costs. In the UAE, Designated Non-Financial Businesses and Professions (DNFBPs) and Financial Institutions (FIs) often face challenges in recruiting skilled AML professionals to carry out KYC and CDD tasks. Moreover, internal inefficiencies can hinder the effectiveness of the entire compliance function, leading to potential non-compliance penalties starting at AED 50,000/-. Our managed KYC and Customer Due Diligence Services address these challenges by streamlining compliance processes and allowing businesses to focus on their core activities.

ESR

As part of the UAE’s commitment as a member of the OECD Inclusive Framework, and in response to an assessment of the UAE’s tax framework by the European Union Code of Conduct Group on Business Taxation, the UAE issued Economic Substance Regulations (Cabinet of Ministers Resolution No. 31 of 2019), (the “Regulations”) on 30 April 2019. Guidance on the application of the Regulations was issued on 11 September 2019 (Ministerial Decision No. 215 of 2019), and Cabinet Decision No. 58/2019 on the Determination of Regulatory Competencies lists the Regulatory Authorities tasked with the administration and enforcement of the Regulations.

Amendments to the Regulations were made by Cabinet of Ministers Resolution No. (57) of 2020 on 10 August 2020, and updated Guidance was issued on 19 August 2020 (Ministerial Decision No. (100) of 2020. The Regulations require UAE onshore and free zone companies and certain other business forms that carry out any of the defined “Relevant Activities” listed below to maintain and demonstrate an adequate “economic presence” in the UAE relative to the activities they undertake (“Economic Substance Test”).

ESR Relevant Activities:

Banking Business

Insurance Business

Investment Fund management Business

Lease – Finance Business

Headquarters Business

Shipping Business

Holding Company Business

Intellectual property Business (“IP”)

Distribution and Service Center Business

Our services

ESR Testing

Navigating the requirements of ESR compliance can be daunting. Our team of experts will guide you through the process by conducting thorough ESR tests. We'll assess whether ESR registration is mandatory for your company, providing clarity and peace of mind.

ESR Notification Submission

Timely submission of ESR notifications is crucial to avoiding penalties and maintaining compliance. Accostax is here to assist you every step of the way. We'll ensure that your notifications are submitted accurately and punctually, saving you time and mitigating risks.

ESR Report Submission

Submitting ESR reports in accordance with regulatory deadlines is essential for demonstrating compliance with the regulations. Our dedicated team will work closely with you to compile and submit your ESR reports promptly and efficiently, enabling you to focus on your core business activities.

DUE date

ESR Notification- with in 6 months from financial year

ESR Filling- with in one year from the end of financial year

Penalties

Failure to file notification	AED 20,000
Failure to file Report	AED 50,000 Demed failure to meets ES Tests
Failure to provide accurate or complete information	AED 50,000 - Deemed failure to meet ES Tests
Failure to meet ES Tests	1st year - AED 50,000 - Information exchange with foreign competent authorities 2nd consecutive year - AED 400,000 Information exchange with foreign competent authorities - Suspension, cancellation or non-renewal of trade license

UBO

What is UBO (Ultimate Beneficial Owner)?

The full form of UBO is the Ultimate Beneficial Owner.

A natural person can only be a UBO. The Ultimate Beneficial Owner owns or controls the legal entity or a natural person who conducts the transaction with the firm. The UBO may or may not be known as the owner of the business.

Reporting entities in the UAE are required to perform UBO checks to identify the real person behind the transactions. The Ultimate Beneficiary Owner checks are important to prevent the business from money laundering and terrorist financing risks.

UAE Cabinet Decision No. (58) of 2020 Regulating the Beneficial Owner Procedures

The UAE Ministry of Cabinet Affairs (‘Cabinet’) published Cabinet Resolution No. 58 of 2020 on the regulation of the Procedures of the Beneficial Owner ‘ (‘Resolution 58’) as part of the UAE’s shift toward greater openness and to be in line with global norms.

Resolution 58 mandated that entities in the UAE (with few exclusions) gather and retain relevant, accurate, and up-to-date information on their genuine beneficiaries (‘Beneficial Owner ‘), as well as inform the authorities. This law establishes a beneficial ownership framework for UAE mainland and free zone entities, as well as requiring the maintenance of necessary UBO registers. The article 5 of the said resolution defines what is a UBO. As per Article 5, UBO is anyone who owns or controls, whether directly or indirectly, through shares or bearer shares:

25% or more of the legal person’s share capital;
or 25% or more of the legal person’s voting rights.

This could be accomplished through a control chain or by having the power to appoint or remove the majority of the company’s management. If no natural person meets the foregoing conditions, or if there are any uncertainties about who does, the UBO is the natural person who has power over the legal person by any other methods. If a natural person cannot be identified, the UBO is the senior manager of the legal entity. The main reason for UBO verification is to arrest financial manipulation, money laundering that goes into funding terrorism, and financial crimes hidden behind the garb of legal entities.

Ultimate Beneficial Owner KYC and CDD requirements

Ultimate Beneficial Owner KYC and CDD requirements help prevent money laundering and misuse of legal entities to hide the illegal activities of funding criminal and terrorist activities. The CDD rule works on four elements which require financial institutions, DNFBPs, and VASPs to maintain written policies and processes to perform the following functions-

Identification and verification of the customer’s identity.

Identification and verification of the UBO of the companies opening accounts by way of obtaining UBO disclosures.

Create a Customer Risk profile by understanding customer relationships.

Regularly monitor transactions to detect and report suspicious transactions. Collect UBO documents and update the customer information regularly.

Accostax Services Help You

Identification of Beneficial Owners
Preparation of all relevant and required documents such as UBO Register, UBO Declaration Form, and Partners Register
Compiling supporting documents required for the submission of UBO documents
Prompt submission of UBO documents to the DED &

Submission of the UBO details in the company’s portal

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