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Dubai Financial Services Authority (DFSA) Annual Report 2018: Key Findings on Anti-Money Laundering (AML)

Overview

The Dubai Financial Services Authority (DFSA) has released its annual report on anti-money laundering (AML) for 2018. This report highlights key findings and priorities in the fight against financial crime.

Key Findings

Authorised Firms

  • The number of authorised firms undertaking correspondent banking activities increased slightly from 2017.
  • Correspondent banking is a critical aspect of AML supervision, as it involves banks conducting business with other banks on behalf of their customers.

Suspicious Activity Reports (SARs)

  • Internal SARs reported by firms increased by 41% from 2017.
  • The number of SARs reported to the Financial Intelligence Unit (FIU) increased by approximately 29%.
  • These figures indicate a significant increase in the reporting of suspicious activities, highlighting the importance of AML monitoring and compliance.

AML Training

  • Most firms provide AML training through a presentation by the Money Laundering Reporting Officer (MLRO).
  • Two-thirds of firms provide training when a significant event occurs, such as rule changes.
  • This suggests that while many firms are providing some level of AML training, there is room for improvement in terms of frequency and comprehensiveness.

Transaction Monitoring

  • 36% of firms use manual systems for transaction monitoring.
  • Manual systems can be prone to errors and may not be able to keep pace with the volume and complexity of modern financial transactions.
  • This highlights the need for firms to invest in more robust AML technologies, such as artificial intelligence and machine learning.

DFSA Priorities

Fighting Financial Crime

  • The DFSA will continue to review its approach to AML supervision and consider relevant findings from the UAE’s Mutual Evaluation Report.
  • This suggests a commitment to continuous improvement and a willingness to adapt to emerging threats in the field of AML.

Thematic Review of Financial Crime Risk

  • The DFSA will conduct a thematic review of financial crime risk, focusing on correspondent banking and sanctions.
  • Correspondent banking is a high-risk area for AML compliance, as it involves banks conducting business with other banks on behalf of their customers.