AML Compliance in the UAE: Tips to Prepare Flawless MLRO Reports

Financial Institutions (FI) and Designated Non-Financial Business and Professions (DNFBPs) are required to appoint a Money Laundering Reporting Officer (MLRO) as per Article 21 of the Cabinet Decision No 10 of 2019. Failing to appoint an MLRO is a severe non-compliance bound to attract hefty penalties. As per Clause (3) of Article 21 of the Cabinet Decision No 10 of 2019, the MLRO is required to submit MLRO Reports to the Authority on a semi-annual basis.

However, companies under AML obligation often fail to properly prepare and submit MLRO Reports. Lack of proper knowledge and experience is the prime reason for such severe cases of AML non-compliance in the UAE. Hiring AML consultants in Dubai is the best way to navigate such challenges. This article will help you understand how to properly prepare MLR reports in the UAE. We will discuss the features, importance and contents of MLRO Reports in the UAE. Read ahead:

What’s an MLRO Report? 

FIs and DNFBPs such as auditors, real estate dealers, precious metal dealers, trust & corporate service providers must appoint an MLRO of AML compliance officer in the UAE. The MLRO should submit a half-year report to the management called MLRO report. Apart from that, a copy of the MLRO Report must also be sent to the regulatory authority as per Article 21 of Cabinet Decision No 10 of 2019.

The report can be prepared by reviewing the company’s internal controls and procedures and their consistency with the AML-CFT Laws. The MLRO should assess the company’s commitment towards the application of the AML-CFT Laws and it must be reflected in the report. The MLRO can assist the management with any updates to build a robust AML-CFT framework in the company. The report should also mention any AML-CFT deficiency identified by the MLRO. The assistance of AML consultants in Dubai can be availed to properly prepare an MLRO Report.

How to Prepare an Effective MLRO Report in the UAE? 

An effective MLRO Report should contain all the mandatory details stipulated in the Cabinet Decision No 10 of 2019. AML consultants in Dubai can advise you on the mandatory specifics to be included in MLRO Reports. Consider the following aspects to prepare a legally valid MLRO Report:

  • Executive summary for the reporting period highlighting serious compliance deficiencies and corresponding remedial action
  • Review the number of Suspicious Activity Reports (SAR) submitted by the staff conduct a quality assessment of SAR reports. If there are none, then mention insufficient training provided for the staff.
  • Report the number of clients declined by the management due to lack of adequate or proper information.
  • State the number of external SARs submitted
  • Report the details of AML-CFT training provided by the management to the company staff. State the number of training courses, mention if new and the current staff members were given training and issues were identified. Give evidence for AML-CFT training in the form of certificates and assessment results.
  • Write about the employee’s level of understanding regarding their role and responsibilities in combatting the money laundering and financing of terrorism
  • Mention if the company needs additional resources to AML-CFT compliance in the UAE
  • Report about the sample review of the Customer Due Diligence (CDD) file to ensure the information provided is relevant and up to date
  • Conduct a check to see if risk assessments of clients are relevant and up to date
  • Sample check to ensure risk ratings of clients are appropriate
  • Check to see whether AML-CFT policies, procedures and risk assessment of the company are relevant and up to date

Role of MLRO in Fighting Money Laundering 

To make quality MLRO reports, AML compliance officers should first understand the role and responsibilities of an MLRO in the UAE. They are:

  1. Implementing and enforcing a proper risk-based approach for the company
  2. Systems and controls within the firm comply with AML-CFT Laws and relevant guidelines
  3. Having a firm grasp over the firm’s money laundering risks.
  4. Complete and periodically update, risk assessment for the firm
  5. Receive internal SARs from the employees
  6. Make final decision on whether suspicions must be reported to the Supervisory Authority

Consult with the Best AML Consultants in Dubai, UAE 

FIs and DNFBPs must appoint an MLRO and submit bi-annual MLRO Reports to the Supervisory Authority. Since many firms struggle to meet this requirement properly, the assistance of AML consultants in Dubai such as Jitendra Chartered Accountants (JCA) will help the companies avoid hefty penalties. JCA is an accounting firm that offers bespoke AML compliance services in Dubai, UAE.

JCA can assist the companies in preparing the MLRO Reports in full compliance with the AML-CFT Law. We can also help the companies develop a robust AML-CFT policy, apart from imparting training to the staff. JCA provides AML penalty services in Dubai in case the company incurs any penalties. Call us to ensure compliance with AML-CFT laws in the UAE.