If your brokerage operates within the Dubai International Financial Centre (“DIFC”) and is regulated by the Dubai Financial Services Authority (“DFSA”), there are specific Anti-Money Laundering (“AML”) compliance obligations you must adhere to. One of the key requirements is the submission of the Annual AML Return.
Key Deadlines and Reporting Period
The Annual AML Return must be submitted by 30 September each year. This submission covers the reporting period from 1 August of the previous year to 31 July of the current year.
The DFSA makes the AML Return available on its e-Portal following the end of the reporting period, i.e., from 1 August to 30 September. This provides regulated entities with a two-month window to complete and submit their returns.
Purpose of the AML Return
The Annual AML Return is a critical compliance tool that allows the DFSA to:
- Assess the effectiveness of a firm’s AML and Counter-Terrorist Financing (“CTF”) systems and controls.
- Ensure compliance with the DIFC’s regulatory framework for AML/CTF.
- Identify potential gaps or risks in a firm’s AML/CTF measures.
Submission Process
- Access the DFSA e-Portal: The AML Return becomes accessible on the DFSA e-Portal starting 1 August each year. Firms should ensure they have the necessary login credentials and access to the portal well in advance.
- Complete the Return: Firms must provide detailed information about their AML/CTF controls, policies and procedures, as well as any updates or changes made during the reporting period.
- Submit by the Deadline: The completed AML Return must be submitted no later than 30 September. Late submissions may result in regulatory penalties or enforcement actions.
Regulatory Framework
The DFSA’s AML/CTF regulatory framework is designed to align with international standards, including those set by the Financial Action Task Force (“FATF”).
While this article focuses on DFSA obligations, firms regulated by other authorities, such as the UK’s Financial Conduct Authority (“FCA”), should similarly align their AML frameworks with FATF standards to ensure international regulatory compliance.
All obligations referenced in this article are underpinned by the DFSA Rulebook, particularly the AML module, which codifies firms’ duties in line with FATF standards.
Firms operating in the DIFC are required to maintain robust AML/CTF measures, including:
- Conducting risk assessments;
- Implementing customer due diligence (“CDD”) and enhanced due diligence (“EDD”) where necessary;
- Firms must also maintain procedures to ensure compliance with UAE and UN sanctions regimes, including screening clients and transactions against applicable sanctions lists;
- Monitoring transactions for suspicious activity; and
- Reporting suspicious transactions to the UAE’s Financial Intelligence Unit (“FIU”) via the goAML platform, in accordance with UAE Cabinet Decision No. 10 of 2019.
More details on the DFSA’s AML/CTF regulatory framework can be found on the official DFSA website: DFSA AML/CTF Regulatory Framework.
Consequences of Non-Compliance
Failure to submit the Annual AML Return by the deadline can result in:
- Financial penalties;
- Increased regulatory scrutiny;
- Potential reputational damage;
- In severe cases, suspension or revocation of the firm’s DFSA license.
Practical Tips for Compliance
- Plan Ahead: Mark the reporting period (1 August – 31 July) and submission deadline (30 September) on your compliance calendar.
- Review Policies: Regularly update your AML/CTF policies and ensure they are aligned with DFSA requirements.
- Assign Responsibility: Designate a compliance officer to oversee the preparation and submission of the AML Return.
- Conduct Internal Audits: Periodically review your AML/CTF systems and controls to ensure they are effective and compliant.
Compliance with the DFSA’s AML Return submission requirements is a critical obligation for brokerages operating in the DIFC. By adhering to the deadlines and maintaining robust AML/CTF measures, firms can demonstrate their commitment to regulatory compliance and contribute to the integrity of the financial system.
How Can Complyport Help?
Complyport offers expert regulatory compliance support to help firms meet their DFSA Annual AML Return obligations:
- AML Framework Review: Assess and enhance your AML/CTF policies, ensuring alignment with DFSA requirements.
- Return Preparation: Assist in compiling and submitting the Annual AML Return accurately via the DFSA e-Portal by the 30 September deadline.
- Staff Training: Provide tailored training on AML/CTF obligations and best practices.
- Ongoing Support: Offer regular audits, gap analyses, and advisory services to maintain compliance.
- Risk Mitigation: Help reduce the risk of non-compliance, avoiding penalties and reputational damage.
Book a meeting with one of our Subject Matter Experts to ensure you remain compliant and well-positioned in the evolving UK regulatory landscape.
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