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Regulatory Authorities Directed to Investigate Financial Institutions and Virtual Asset Providers

The United Arab Emirates (UAE) has issued a stern warning to financial institutions, non-financial designated businesses and professions, virtual asset service providers, and non-profit associations subject to its supervision. The warning emphasizes the importance of ensuring compliance with anti-money laundering (AML) regulations.

Compliance with AML Regulations

According to Article 4 of Federal Decree-Law No. (20) of 2018 on Anti-Money Laundering, Combating the Financing of Terrorism and Financing of Illegal Organizations, regulatory authorities are instructed to investigate these entities for their commitment to implementing measures to prevent money laundering and terrorist financing.

Information Exchange and Coordination

The article also directs regulatory authorities to facilitate information exchange and coordination between relevant authorities represented in the Committee. Additionally, it requires them to evaluate the effectiveness of the AML system through collecting statistics and other relevant information from concerned authorities.

Risk Evaluations and Supervision Operations

Article 13 requires regulatory authorities to conduct risk evaluations, supervision operations, and office inspections to ensure compliance with AML regulations. Regulatory authorities are also empowered to impose administrative penalties, including fines, suspension of activities, and cancellation of licenses, for violations of AML regulations.

Administrative Penalties

The UAE has taken a tough stance on AML compliance, imposing severe penalties on entities found guilty of non-compliance. Article 14 outlines the range of administrative penalties that can be imposed, including warnings, fines, suspensions, and cancellations of licenses.

Reporting Suspicious Transactions

In related news, Article 15 requires financial institutions, non-financial designated businesses, and virtual asset service providers to report suspicious transactions promptly and directly to the relevant authorities. Certain professionals, such as attorneys and notaries, are excluded from reporting requirements due to professional confidentiality obligations.

Continuous Identification of Crime Risks

Finally, Article 16 obliges financial institutions and designated non-financial businesses and professions (DNFBPs) to continuously identify, evaluate, document, and update crime risks in their field of work. They must also take all due diligence procedures and measures to prevent money laundering and terrorist financing.

Call to Action

Regulatory authorities are instructed to investigate the commitment of financial institutions, non-financial designated businesses and professions, virtual asset service providers, and non-profit associations subject to its supervision concerning the application of measures to prevent money laundering and terrorist financing.