Financial Crime World

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Sanctions Compliance for Licensed Financial Institutions (LFIs) in the UAE

As a Licensed Financial Institution (LFI) in the UAE, it is essential to understand the key points related to sanctions compliance. This article will summarize the provided text into key points and provide guidelines on how to maintain compliance.

Key Points: Sanctions Evasion and Compliance

Sanctions Evasion

LFIs must not only monitor for sanctions violations but also identify potential evasion risks. Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) play a critical role in combination with sanctions screening to prevent more complicated forms of sanctions evasion.

  • Monitor for red flags of potential evasion risks
  • Conduct thorough CDD and EDD
  • Implement effective sanctions screening processes

Prohibited Activities

LFIs should prohibit activities that aim to evade or circumvent sanctions prohibitions. Specific prohibited activities include:

  • Tipping off customers
  • Omitting information about customers or transactions
  • Accepting incomplete or false information
  • Providing false or incomplete information to counterparties
  • Engaging in other activities that could cause a conflict with or failure to comply with this Guidance

Key Points: Prohibited Activities and Maintenance of UN Consolidated List

Maintenance of UN Consolidated List and Local Terrorist List

LFIs should rely on official websites for the most updated information:

  • Rely on the official website of the UNSC for the most updated UN Consolidated List
  • Rely on the official website of the Executive Office to obtain the most recent publication of the Local Terrorist List issued by the UAE Cabinet

Key Points: Customer Screening

Customer Screening

Screening processes should be conducted at various stages of the customer lifecycle:

  • Periodic name screening
  • Ad hoc name screening
  • Re-screening

By following these guidelines, LFIs in the UAE can ensure they maintain compliance with sanctions regulations and prevent potential evasion risks.