Money laundering is a large-scale problem that occurs all around the world. Because these are unlawful activities that are difficult to trace, there is no clear data or even estimations of how much money people laundered each year.
To combat money laundering, several international organizations, as well as global and regional integrated committees and task groups, collaborate. The Financial Action Task Force (FATF), the International Monetary Fund (IMF), the International Money Laundering Information Network (IMoLIN), Interpol, the World Bank, the United Nations Office on Drugs and Crime (UNODC), the European Commission, and the Offshore Group of Banking Supervisors are just a few of the organizations involved.
The Financial Action Task Force (FATF) is a global watchdog for money laundering and terrorism financing. It was founded in 1989 during the G7 Summit in Paris. It began by developing ways to combat simply money laundering; in 2001, it grew to include terrorist financing, and in 2012, it added financing for the proliferation of weapons of mass destruction.
The United Arab Emirates is a member of the MENAFATF. It has implemented anti-money laundering and counter-terrorist financing policies to improve its banking and financial system’s battle against money launderers, and it conforms with the FATF’s 40 Recommendations. Some of the most important initiatives by the UAE in response to AML are:
NRA (National Risk Assessment)
The UAE created the National Risk Assessment (NRA), which enumerates the primary vulnerabilities that enterprises face in terms of money laundering, as well as their consequences. The relevant committee, which gives the country-level AMLCFT framework a boost, has developed and released a national AML Strategy.
Network of financial intelligence
The country’s financial intelligence network has a solid grip over information sources. As a result, they conduct financial investigations by gathering information from many financial sources in order to detect fraud, money laundering, and terrorist financing schemes.
Investigations under the 2018 national policy’s prioritizing of money laundering, police have been highly active in uncovering cases of money laundering. Authorities are eager to uncover the money laundering threats that individuals and corporations face, and as a result, they are pushing for more investigation, prosecution, convictions, and punishments. The government is also working to strengthen the collaboration among key agencies in order to hire skilled individuals, train their staff, and raise their awareness of anti-money laundering policies and procedures.
Taking a risk-based strategy
In their respective areas of expertise, the Insurance Authority on the mainland, the Dubai Financial Services Authority (DFSA), and the Abu Dhabi Financial Services Regulatory Authority (FSRA) have designed and developed a risk-based approach for the supervision of money laundering and terrorist financing risks. As a result, banking authorities, including the Central Bank, the Securities and Commodities Authority (SCA), and the Banking Supervision Department (BSD), are presently conducting a thorough examination of money laundering concerns.
By implementing an AML statute in 2018 and an AML by-law in 2019, the UAE has enhanced its AML/CFT framework. These are extensive restrictions that cover a wide range of money laundering issues. Concerns about a risk-based strategy, greater intra-agency coordination, beneficial ownership rules, improved money laundering investigations, and international cooperation are among the other new regulations. The administration has also been engaged in the development of many committees that will help authorities better coordinate and cooperate on money laundering and terrorist financing concerns and initiatives.
Anti-money laundering legislation in Dubai is mostly based on UAE federal legislation, which complied with worldwide AML/CFT standards put forth in the Financial Action Task Force’s recommendations (FATF). The following acts of federal legislation control AML in Dubai:
The independent and complementary DIFC Regulatory Law 2004 imposes unique AML/CFT restrictions on the special economic zone, which is under the jurisdiction of the DFSA, besides the UAE-wide laws. Article 7(1) of the Regulatory Legislation of 2004 mandates that businesses in the DIFC adhere to the duties imposed by UAE federal law.
Banks, financial institutions, and other obliged businesses must apply for and get a license from the DFSA in order to operate in the DIFC.
The UAE has been a leader in enacting anti-money laundering legislation on a national level, and it will continue to collaborate internationally to improve efforts and outcomes. Organizations must take measures to protect the integrity of their activities on their own. You can do this by hiring AML compliance consultants or consulting organizations to help you identify the dangers of money laundering in your industry and implement appropriate AML frameworks to stay within the legal, professional, and ethical bounds of AML compliance.
Alya Auditors can address your concerns and provide help in a variety of tax and accounting services. Alya Auditors is a company that provides tax accounting services. Alya Auditors have worked in a variety of entities in the UAE, establishing tax accounting and supporting tax-related activities. Please contact us if you’d like to learn more about how our services might help your company.