In April 2020 the Financial Action Task Force (FATF) issued a warning to the UAE to improve its anti-money laundering (AML) and counter-terrorism financing (CFT) framework, or risk being placed on the FATF ‘grey’ list. Subsequent to this, in August 2020, the Central Bank of UAE (CBUAE) established a dedicated department to handle all Anti-Money Laundering and Combatting the Financing of Terrorism matters (AML/CFT), (previously managed under the Banking Supervision Department).
Regrettably, this was not enough and in March 2022, the UAE was indeed placed on the FATF ‘grey’ list.
Since being placed on the list, the UAE government has taken affirmative steps to better align itself with the global standards on anti-money laundering and counter terrorist financing as set out by the FATF’s 40 Recommendations and significantly strength its anti-financial crime framework.
The UAE government/CBUAE has taken a number of initiatives and action, it has:
- Set up courts focused on financial crimes,
- Established an entity that ensures better collaboration between the central bank and other authorities,
- Announced a 9% corporate tax starting in 2023.
- Issued new guidance (August 2022) on AML/CFT for licensed financial institutions (LFIs) on risks related to payments. The guidance comes into effect immediately, and LFIs must comply with it within a month. The guidance aims to assist LFIs’ to better understand the risks and effective implementation of their statutory AML/CFT obligations.
- Issued new guidance for LFI’s on risks related to politically exposed persons (PEPs). The guidance advises LFIS on the due diligence on PEPs and their direct family members or close associates that they are required to undertake. As with the general AML/CFT guidance, it comes into immediate effect with LFI’s having to comply within a month.
- Added six more sectors into its AML/CFT regime, including financial institutions, dealers in precious metals and stones, real estate and lawyers.
- Imposed $11.2 million in penalties for anti-money laundering cases during first half of 2022, including one fine of $1.4 million on an exchange house after the CBUAE found that it had a weaknesses in its controls and framework regarding its due diligence policies and procedures.
These are the first steps being taken by the CBUAE to address their FATF identified deficiencies, but this is an encouraging start, and identifies a clear and immediate course of being taken. However, as with everything, it shall of course be the effectiveness of these changes by which the effort to bring them in will be judged.
Anti-Financial Crime Support – How can Complyport Help?
Our experienced Financial Crime and Forensics team led by Martin Schofield—one of the world’s leading specialists in the field—brings a wealth of experience to every project we are engaged in. Our highly experienced financial crime professionals and forensic experts, in subjects such as anti-money laundering, counter terrorist financing, anti-bribery and corruption and fraud and regularly help our clients navigate the complexities of the financial crime and money laundering environment. Services offered by Complyport include:
- Financial crime health checks and audits,
- Implementation of financial crime, AML, CTF, ABC, Fraud and market abuse controls and frameworks,
- Ongoing advice on financial crime, AML, CTF, market abuse and fraud prevention,
- Authoring/reviewing financial crime policies,
- Outsourced MLRO support
- Outsourced KYC and CDD support,
- Assistance in identifying Politically Exposed Persons (PEPs),
- Assistance in navigating international sanctions,
- Support with preventing market abuse and insider dealing,
- Expert Witness in Financial Crime cases
- Forensics and Investigations
- Design and/or delivery of online or face to face financial crime training
If this article has raised any questions, or you think your firm may require assistance, please contact either Martin Schofield via martin.schofield@complyport.co.uk or Jan Hagen via jan.hagen@complyport.co.uk to book in a free consultation.
About Complyport
Complyport is the City’s market leading consulting firm supporting the UK financial services industry for over 20 years. We specialise in providing Governance, Risk and Compliance services to support the regulated financial services industry to raise standards and thrive.
Complyport advises and assists firms to become authorised and to comply with the rules and requirements of regulators on an ongoing basis. Our vision is to be there for our clients every step of the way, helping them change, grow, and excel through expertise, insight, and innovation, and in so doing to become our clients’ most valued supplier and trusted advisor.
We have successfully assisted over 1000 firms to become authorised with the FCA and EU and are providing regulatory support to over 600 regulated firms on an ongoing basis globally. With presence in the UK and EU, as well as via our Associates Network, Complyport can assist firms across multiple jurisdictions.
Complyport’s multidisciplinary consultants possess deep expertise in their field, having acted in FCA skilled person reviews, as expert witnesses in legal cases and as expert investigators for firms or their legal advisers.
Day to day, we conduct audits and reviews of a firm’s products, processes, policies, and procedures to identify scope for business, to determine the impact of regulatory developments and to verify compliance with local regulations. Our clients tell us we live our values; we are driven, agile and collaborative.
