Key Compliance Requirements to Meet AML Obligations in ADGM Free Zone

Companies incorporated in the Abu Dhabi Global Market (ADGM) Free Zone are required to meet the requirements as per the Anti-money Laundering and Combatting Financing of Terrorism (AML-CFT) Law. The ADGM rule book on AML-CFT  applies both to the financial institutions as well as Non-Financial Designated Businesses & Professions (DNFBPs) such as Dealers of Precious Metals & Precious Stones, Real Estate Brokers, Lawyers, Auditors and Trust & Corporate Service Providers.

The ADGM companies must comply with the AML regulations such as developing a robust AML-CFT framework, appointing an AML Compliance Officer / Money Laundering Reporting Officer (MLRO), providing training to employees etc. Furthermore, the AML framework and policies must be reviewed at least annually. Failing to ensure AML compliance in the UAE may attract hefty penalties, which can be avoided by seeking the help of AML consultants in the UAE.

In this article, we will take you through all the mandatory requirements your company is required to comply with. Read ahead.

What is an AML Rule Book in Abu Dhabi Global Market?

The ADGM Authority has designed the AML Rule Book as a single-point reference for all the entities regulated and controlled by the ADGM Regulator. The Rule Book specifies the requirements for Anti-Money Laundering and Sanctions compliance for all the entities incorporated in the ADGM. The Rule Book for AML in ADGM also considers that different companies have different AML risk profiles.

All the ADGM companies are required to read and comply with the clauses specified in the Rule Book apart from understanding the extent to which the clauses apply to them. However, the ADGM AML Rule Book should not be isolated from the UAE AML legislation or international standards laid out by the Financial Action Task Force (FATF). Get to know more about the ADGM AML requirements from the best AML consultants in the UAE.

General Requirements to Comply with AML in ADGM

An ADGM company is required to establish and maintain robust AML-CFT policies, procedures, systems and controls to save itself from the risk of money laundering. Such an AML policy or framework should meet the following requirements:

(a)    Compliance with UAE Federal AML Legislation

(b)   The AML framework must enable detection & reporting of suspicious Persons and Transactions

(c)    The company should be able to provide an audit trail of a Transaction

(d)   The company should ensure compliance with any other AML obligations

(e)   Ensure that all the employees  comply with the requirements of the AML policies, procedures, systems & controls

Review of Anti-Money Laundering Policies

A company under obligation must review the effectiveness of its AML policies, procedures, systems and controls at least annually. The annual AML policy review in the ADGM can be done internally by the company’s internal audit team, or the company can outsource the function to third-party audit firms in the UAE. The review of the AML policy must include at least the following:

(a) A sample testing of customer documentation relevant to an assessment of the adequacy of the customer risk assessment or CDD performed by the company under obligation

(b) An analysis of all Suspicious Activity Reports pinpointing any area where procedures or AML training needs to be improved

(c) A review of the adequacy of the level of responsibility and oversight of the company’s Governing Body and Senior Management to ensure the entity has implemented and maintained adequate controls

Appoint a Money Laundering Reporting Officer in ADGM

A company that is required to meet AML obligations in ADGM must appoint an individual as MLRO. The MLRO must have a sufficient level of seniority, experience and independence to perform the role with responsibility. The MLRO should be able to implement and oversee the compliance of the company with respect to the Rules in the ADGM AML Rulebook. The MLRO of an ADGM company should also meet the following requirements:

A). MLRO must be a UAE resident

B). An individual appointed as the MLRO of a DNFBP that comprises one officer, partner or principal can be the same person as the officer, partner or principal of the DNFBP. However, prior approval from the regulator must be obtained for this.

C). The individual appointed as the MLRO of an ADGM Representative Office must be the same individual who holds the position of Principal Representative of that Representative Office

Impart AML Training for Employees

A company under AML obligation in ADGM should impart training and awareness to all of its employees at appropriate and regular intervals. The AML training should enable the employees to achieve the following goals:

  1. Know the identity and responsibilities of an MLRO and their deputy
  2. Understand relevant AML legislations, including the Federal legislation
  3. Understand the company’s AML policies, procedures, systems and controls and any amendments to those
  4. Understand the employee’s role and responsibility in preventing the money laundering risks
  5. Being aware of the prevalent money laundering techniques, methods and typologies relevant to the company
  6. Understand the types of activities that may be classified as a Suspicious Activity under AML in the UAE

Consult with the Best AML Consultants in the UAE

Ensuring AML compliance in the UAE is not just about ticking the boxes. You need to implement a risk-based AML program to ensure compliance with the AML laws in the ADGM and the Federal AML legislation. AML consultants in the UAE, such as Jitendra Chartered Accountants (JCA), can help you combat money laundering without any hassle. JCA offers comprehensive yet practical AML services in the UAE that encompass counter-terrorist financing. Our expert assistance includes:

  • AML Risk Assessment specific to the industry
  • Implementation and review of effective AML/CFT policies & procedures
  • Advice on staffing requirements for AML/CFT department
  • Assistance for staff awareness training
  • AML Penalty Appeal Services in the UAE