Financial Crime World

Title: UAE’s Central Bank Cracks Down on Financial Crime: A Guide to AML/CFT Regulations and Compliance in the UAE’s Global Business Hub

Background

The United Arab Emirates (UAE) has emerged as a major financial powerhouse, attracting investment from around the world. However, this prosperity has made the UAE a target for financial criminals seeking to exploit its financial system. In 2022, the Financial Action Task Force (FATF) added the UAE to its list of Jurisdictions under Increased Monitoring (grey list) due to deficiencies in its Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) controls, including international sanctions violations. In response, the UAE government vowed to enhance its AML/CFT framework and crack down on non-compliant organizations.

The Role of the Central Bank of the UAE (CBUAE) and AMLD

The CBUAE, through its Specialised Anti-Money Laundering and Combatting the Financing of Terrorism Supervision Department (AMLD), is at the forefront of this endeavor. Established in 2020, AMLD acts as the CBUAE’s primary interface for regulatory compliance and works closely with law enforcement authorities and the UAE’s Financial Intelligence Unit. The department’s objectives include:

  • Examining licensed financial institutions (LFIs)
  • Ensuring compliance with the UAE’s AML/CFT regulatory and legal framework
  • Identifying threats, emerging risks, and weaknesses within the financial system

Regulatory Collaboration

To meet these objectives, AMLD collaborates with the CBUAE’s Banking Supervision Department and the Enforcement Division to conduct investigations of potential regulatory violations and impose penalties on non-compliant firms. It also works with the UAE cabinet to develop AML/CFT legislation, issues periodic compliance guidance, and coordinates with international counterparts.

UAE’s AML/CFT Legislation

The UAE’s main AML/CFT articles of legislation are:

  1. Federal Decree-Law No. (20) of 2018
  2. Cabinet Decision No. (10) of 2019

These regulations require firms to develop and implement a risk-based AML/CFT program, which includes:

  • Know Your Customer (KYC) checks
  • Risk screening solutions
  • Reporting and record-keeping processes
  • Compliance governance

The UAE government has made political commitments to address the FATF’s action plan and has recently demonstrated progress by integrating digital identification systems into AML/CFT compliance solutions.

AML/CFT Compliance for Firms

To comply with the UAE’s AML/CFT regulations, firms should implement risk-based solutions like:

  • Customer identification
  • Enhanced due diligence
  • Transaction screening
  • Sanctions and watchlists checking
  • Adverse media screening

Effective adverse media screening involves multi-language searches to capture regional variations and minimize false positives.

Technology Solutions for Compliance

In response to the UAE’s modernizing regulatory framework, firms must invest in suitable technology solutions. Next-generation AML screening platforms, like Ripjar’s Labyrinth Screening, can assist in managing the evolving regulatory requirements by extracting relevant, up-to-date information from various data sources in real-time. These platforms deliver detailed customer risk profiles, enabling firms to make informed compliance decisions and react to emerging threats with confidence.

Contact Ripjar to discuss how their next-generation AML compliance solutions can support your business in the UAE.