AML Compliance for DNFBPs in DIFC
Money laundering and terrorist financing remain persistent threats to financial systems. These crimes affect not only banks but also other businesses that handle money and valuable assets. In the Dubai International Financial Centre (DIFC), Designated Non-Financial Businesses and Professions (DNFBPs) face this risk every day.
Strict compliance with Anti-Money Laundering (AML) rules is essential in addressing these risks. In DIFC, the Dubai Financial Services Authority (DFSA) has issued detailed requirements for DNFBPs to follow. These rules help protect businesses, keep the financial center safe, and align the UAE with global standards.
JCA (Jitendra Chartered Accountants) is equipped with professional AML consultants in the UAE who help businesses fully understand compliance requirements and comply more effectively.
Who Are DNFBPs in DIFC?
DNFBPs cover a wide range of professionals and service providers. In DIFC, they include:
- Real estate developers and brokers involved in property transactions.
- Dealers of precious metals, stones, or high-value goods when transactions are above AED 55,000.
- Law firms, notaries, auditors, accountants, and insolvency firms conducting certain client transactions.
- Company service providers offering directorships, nominee services, or registered office facilities.
- Single Family Offices.
These groups are considered high-risk because their services can be misused to hide illegal funds. The categories also reflect global standards set by the Financial Action Task Force (FATF), of which the UAE is an active member.
Registration and Oversight
Every DNFBP operating in DIFC must register with the DFSA. This is done through a notification process. Changes in name, ownership, or address must be reported immediately. If a DNFBP ceases its regulated activity, it must notify the DFSA immediately.
The DFSA supervises DNFBPs using a risk-based approach. It works with businesses to manage risks but can also take strict action. Its powers include requesting documents, inspecting operations, and imposing financial penalties, issuing public censures, and even restricting or banning individuals from performing controlled functions. Learn more about the subject from our AML consultants in the UAE.
Key Compliance Duties
- Policies and Controls
DNFBPs must create internal systems to prevent money laundering and terrorist financing. These systems should allow easy detection of unusual transactions, create an audit trail, and ensure compliance with UAE Federal AML laws.
- Appointment of MLRO
Each DNFBP must appoint a Money Laundering Reporting Officer (MLRO). This person must have senior authority, access to all necessary information, and enough resources to do the job. Their main duties include:
- Putting AML policies into practice.
- Handling suspicious activity reports from employees.
- Submitting reports to the UAE’s Anti-Money Laundering Suspicious Cases Unit (AMLSCU) and notifying the DFSA.
- Preparing annual AML compliance reports for senior management.
- Customer Due Diligence (CDD)
DNFBPs must verify who their customers are, including beneficial owners. They need to check the source of funds and assess the client’s risk level. In higher-risk cases, such as Politically Exposed Persons (PEPs) or customers from high-risk countries, enhanced checks are required.
- Ongoing Monitoring and Record Keeping
Transactions must be monitored on a continuous basis. Any unusual activity must be flagged. All identification and transaction records must be retained for at least six years from the date a business relationship ends, or a transaction is completed.
- Suspicious Transaction Reporting
Employees are required to report any doubts of money laundering or terrorist financing to the MLRO. If necessary, the MLRO will file an external report. DNFBPs must never disclose to a client that a Suspicious Activity Report has been filed or that an investigation is underway, as doing so constitutes the offence of “tipping off” under UAE AML law.
- Training and Awareness
AML training is compulsory for all DNFBP employees. Training should be relevant to the nature of the business and must be provided on a periodic basis. It ensures that staff recognize suspicious patterns and understand how to act responsibly. AML consultants in Dubai can provide an effective training.
Single Family Offices
In DIFC, Single Family Offices are subject to slightly different AML rules. They are still required to carry out due diligence, appoint an MLRO, and report suspicious activities. The DFSA recognizes their unique structure but holds them accountable under UAE Federal law.
International Standards and Local Responsibility
The DIFC’s AML rules for DNFBPs align closely with FATF recommendations. This global alignment ensures that DIFC remains attractive to investors while also safeguarding against financial crime. Local businesses must take responsibility for applying these rules in practice.
Why AML Compliance Matters for DNFBPs
Failing to comply with AML obligations is not a minor issue. DNFBPs risk regulatory fines, reputational damage, and possible criminal charges. On the contrary, following the rules helps build client trust, strengthens credibility, and supports DIFC’s reputation. DNFBPs can seek assistance from AML consultants in Dubai to simplify compliance.
How can JCA (Jitendra Chartered Accountants) help?
The DFSA has established precise requirements; however, the responsibility lies with each DNFBP to integrate compliance into their daily operations. Strong systems, a trained workforce, and a culture of accountability are the best defenses against financial crime. JCA can help you build such a strong defense system in your organization. Our expert AML consultants in the UAE will identify gaps in your system, enhance it, train your team, and more. Consult our experts today!