DNFBPs must Strengthen AML Compliance in UAE as Fines Mount

Designated Non-Finance Businesses and Professions (DNFBP) need to take AML laws seriously and create a positive attitude among their staff when it comes to complying with Anti-Money Laundering and Combatting Financing of Terrorism (AML-CFT) regulations in the UAE.  Most DNFBPs specially real estate brokers and DPMS ( Dealers in Precious metals and Stones) are not hiring either professional consultant or appointing dedicated qualified Money laundering officer to nurture the compliance atmosphere in the organisation. Hence of late, an alarming number of DNFBPS have incurred hefty fines for failing to comply with AML-CFT regulations in the UAE. Such a dire situation could have been averted had they availed of the services of AML advisers in Dubai.

The latest report by the UAE Ministry of Economy should serve as an eye-opener for the DNFBP companies that include real estate agents & brokers; dealers of precious metals and stones; auditors; and trust & corporate service providers. Let’s have a look at the news report to see what led to the AML penalties in the UAE and suggest relevant remedial measures. Read ahead for gaining useful AML insights:

DNFBPs Incur Hefty AML Penalties in the UAE

As per the Ministry of Economy, fines worth AED 65.9 million have been imposed on 137 companies in the UAE that are classified as DNFBPs. It is appalling that the statistics are from the first quarter of 2023. The administrative penalties were imposed by the Ministry after conducting AML inspections on 840 companies.

The penalized DNFBPs were found to have failed to ensure full compliance with the provisions stipulated by Federal Decree-Law No. 20 of 2018 on AML-CFT anti-money laundering, its executive regulations and related laws. DNFBPs are advised to build a robust AML compliance framework with the help of AML consultants in Dubai, UAE.

Reasons for AML Fines in the UAE

As per the Ministry of Economy, the DNFBPs were found to have committed a total of 831 AML violations in the UAE. The main violations include the failure to adopt necessary measures and procedures to identify the risks of crime in their field of work. The Ministry also found that the companies failed to establish internal policies and procedures to check customer databases and transactions against names mentioned on the terrorism list, which was issued under the provisions of Cabinet Resolution No. 74 for 2020 on the UAE’s list of terrorists.

Reasons for Failure of AML Compliance in the UAE

The UAE has robust laws and regulations to counter the menace of Money Laundering and Financing of Terrorism (ML/FT). Companies in the DNFBP sector need to ensure compliance with such laws or face hefty fines in case of compliance failure. Below are some of the common reasons for AML compliance failures in the UAE:

  1. No dedicated AML compliance officer
  2. Lack of proper AML training
  3. Lack of clarity on customer data
  4. Weak KYC process
  5. Unorganized storage of data
  6. False positives
  7. Lack of general compliance culture within the organization
  8. Not conducting an independent AML audit in the UAE

Remedial Measures to Prevent AML Compliance Failure

Saving a company from incurring hefty AML fines in the UAE requires immense work. Most companies incur AML penalties due to gaping deficiencies in their AML compliance programs. Letting AML consultants in Dubai review the AML programs is one of the best ways to prevent this. More remedial measures are listed below:

  1. Build a strong compliance culture within the company
  2. Avail of AML consulting services in the UAE
  3. Implement effective AML software
  4. Designate a compliance officer
  5. Develop written internal policies
  6. Train employees
  7. Schedule an independent third-party audit
  8. Adopt a risk-based procedure for customer due diligence
  9. Implement ongoing AML monitoring

Need Help? Hire the Best AML Consultants in Dubai

Despite implementing robust AML regulations, a great number of companies in the DNFBP sector are incurring hefty AML penalties in the UAE. Companies need to review their AML programs and internal controls urgently to identify deficiencies and employ remedial measures. AML consultants in Dubai such as Jitendra Chartered Accountants (JCA) can look into your company’s AML framework and offer valid insights.

Developing a strong AML-CFT framework with our compliance professionals can help you shield the company against hefty AML fines in the UAE. JCA chiefly offers the following types of AML services in the UAE:

  • Industry-specific AML Risk Assessment
  • Implementation and review of effective AML/CFT program
  • Advice on staffing requirements for AML/CFT department
  • Assistance with staff awareness training
  • AML Penalty Appeal Services