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UAE Tightens Noose on Money-laundering with Penalties up to AED 1 Million

The UAE has boosted the Anti-Money Laundering / Combating Financing of Terrorism (AML/CFT) regime with tougher penalties ranging from AED 50,000 to AED 1 Million. The Ministry of Economy has released a list of 26 violations and corresponding penalties to fight the crime of money laundering and terrorism financing. The new penalties are applicable to Designated Non-Financial Businesses and Professions (DNFBPs), who can ensure enhanced AML compliance with the help of AML consultants in Dubai.

DNFBPs include auditors & accountants, corporate service providers, real estate agents, lawyers and dealers of precious metals and stones. Three categories of violations attract the highest degree of penalty, which is AED 1 Million. These violations mainly cover dealing with fake banks and having bank accounts in fake names. In this article, we offer a helping hand to the businesses to make them aware of the penalties. Read ahead for the full list of violations and penalties for money laundering and financing of terrorism.

Full List of Penalties for Violating AML/ CFT Requirements

The best way to ensure compliance with laws is to understand the consequence of violations. The fear of consequences will force the businesses to ensure compliance in a robust manner. This is the reason why the below list is organized in the descending order of penalties.

AED 1 Million Penalty

The highest level of penalty for flouting AML / CFT compliance requirements is AED 1 Million. Three categories of non-compliance actions are bound to attract the highest penalty:

  • Dealing with unauthorized banks in anyways
  • Opening and maintaining bank accounts using an alias or fake names
  • Failure to take the special measures concerning the customers included in international or local sanction lists before establishing or maintaining a business relationship

AED 200,000 Penalty

The following violations are liable for a fine of AED 200,000

  • Not taking enhanced due diligence measures to manage high risks
  • Failure to respond to FIU’s requests for additional information regarding any reported suspicious transactions
  • Disclosing, directly or indirectly, to the customer or a third party, the process of, or intention to, report the customer due to suspicions about the nature of the business relationship with the customer
  • Failure to implement the measures identified by the National Committee for Combating Money Laundering in respect of customers from high-risk countries

AED 100,000 Penalty

Committing the following types of violations will incur a penalty of AED 100,000:

  • Failure to take the necessary measures to determine crime risks in his field of work.
  • Failure to identify and evaluate risks that may arise in his field of work when he develops the services he provides or undertakes new professional practices through his establishment
  • Failing to implement due diligence measures towards clients before starting or maintaining a business relationship with customers
  • Failure to verify the identity of the customer / real beneficiary using documents or data from a reliable and independent source.
  • Delay in informing the Financial Information Unit of a suspicious transaction report despite reasonable grounds to suspect that the business relationship with the customer is related to the crime in whole or in part
  • Failure to implement due diligence measures towards politically exposed customers prior to establishing or maintaining a business relationship
  • Failure to create records on financial transactions with the customers

AED 50,000 Penalty

The violations under this category are mostly related to failure to take due diligence measures and failure to maintain records. Consult with AML consultants in Dubai to avoid committing the following violations:

  • Creating a fraudulent document or records to save the financial transactions with the customers that does not enable data analysis and financial transaction tracking
  • Failing to take the appropriate measures to minimize the identified risks according to the results of the national risk assessment
  • Failure to create internal policies, procedures and controls in the organization to combat crime or engaging in a suspicious business relationship
  • Failing to implement simplified due diligence measures to manage low risk
  • Not taking appropriate measures to understand the purpose and nature of the business relationship, or failure to obtain information related to this purpose when required
  • Failing to take the required steps to understand the nature of the client’s business, the ownership structure of the client’s work and the extent of the client’s control over the business
  • Failing to take due diligence measures for constant monitoring of clients during the business relationship
  • Not appointing a compliance officer
  • Not keeping records of the financial transactions and relevant documents for five years from the date of transaction completion, or the expiry of the business relationship with the customer
  • Failing to give access to the competent authority to verify information related to customers’ due diligence and continued monitoring, as well as the findings of analyzing the same, and the records, files, documents, correspondence, and forms
  • Failure to provide AML / CFT training to the employees

Hire the Best AML Consultants in Dubai, UAE

The Ministry of Economy has issued a full list of penalties for violating AML/ CFT regulations. The hefty penalty is an indication that the government is tightening its noose around those who fail to ensure AML / CFT compliance in the UAE. In light of the enhanced compliance requirements, the businesses need the expert assistance of the best AML consultants in Dubai, UAE, such as Jitendra Chartered Accountants (JCA). JCA has a highly qualified professional team who can save the businesses from penalties by providing services such as implementing compliance Policy and procedures, assessment of tools and controls design, current AML Policy review, AML/ KYC/ CFT Plan and framework, AML audit and reporting, corporate training etc.

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