a guide to aml/cft regulations - aml uae
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Introduction
Money laundering and the financing of terrorism are crimes that threaten thesecurity, stability and integrity of the global economic and financial system, and ofsociety as a whole. The Anti-Money Laundering Law has been enacted to combatmoney laundering, terrorist financing and other related threats to the nation.
The principle AML/CFT legislation applicable is the Federal Decree-Law No. (20) of 2018 On Anti-MoneyLaundering and Combating the Financing of Terrorism and Financing of Illegal Organisations (the“AML-CFT Law” or “the Law”) and implementing regulation, Cabinet Decision No. (10) of 2019 Concerningthe Implementing Regulation of Decree Law No. (20) of 2018 On Anti-Money Laundering and Combatingthe Financing of Terrorism and Illegal Organisations (the “AML-CFT Decision” or “the Cabinet Decision”).
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What is DNFBPsCompanies carrying out the following trade or business activities are known as Designated Non-financial Businesses and Professions (DNFBPs):
Auditors and Accountants
Lawyers, notaries and other legal professionals and practitioners
Company and trust service providers
Dealers in precious metals and stones (DPMS)
Real estate agents and brokers
Any other Designated Non-Financial Businesses and Professions (DNFBPs) not mentioned above.
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When do AML/CFT obligations apply to DPMS?
STEP FINISHED
Under the AML-CFT Law and the AML-CFT Decision, DPMS areobliged to apply the required AML/CFT measures when theyqualify as DNFBPs.
This occurs whenever they carry out any single transaction, orseries of transactions that appear to be related, whose monetaryvalue equals or exceeds AED 55,000.
This may include one or more transactions involving the samebusiness relationship or customer, whether related to a singleitem or set of items; or it may also include one or moretransactions which, in the judgment of the dealer, appear to bestructured so as to avoid the established threshold.
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Summary of AML/CFT obligations of DPMS
STEP FINISHED
Define Internal Policies, Controls, and Procedures
Carry out KYC
Screening Risk Profiling
Perform Enhanced Due
Diligence
Submit STR Record Keeping
Repeat Process
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Define and regularly update internal policies, controls, and procedures to mitigate ML/FT risks in accordance with the nature and size of business
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Why?To identify the customer and assess ML/TF risk
When?
Existing CustomerIf there’s a suspicion as to ML/TF, change in client information
New CustomerBefore starting the business
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Why?To identify if the customer is already a part of UNSCR list or local list.
How? Name Check
Freeze Funds /Reject Transaction
Submit STR
Sanction ListSanction List can be downloaded from https://www.uaeiec.gov.ae/en-us/United-Nations-Security-Council-Sanctions . Also subscribe to UN & Local Sanctions mailing list to receive intimation on their update.
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Why?To implement a risk-based approach to assess and mitigate ML/FT risk.
How?Customer Name
Nationality Occupation PEP? (Yes/No)
Sanctioned Person (Yes/No
Location of Business
Transaction Value (AED)
Payment mode
ML/TF Risk Rating
ABC Indian CEO Yes No Mumbai 350,000 Cheque HighPQR Canadian MD No No Toronto 500,000 Cheque MediumXYZ Russian Sr Officer No No Moscow 45,000 Bank
TransferLow
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Why?Dealing with high-risk clients and PEPs, require better controls and approval from senior management
How?KYC form should capture if the customer is a PEP
1 Ask for more information and verify documents
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Seek management approval before dealing with the client
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Why?STR provides valuable information to FIU as to potential ML/TF activities
STR Dos and Don'ts
Submit STR without any delay
Provide as much information as possible in the STR form
Dos
Dos
Disclose the submission to anyone else
Tip-off the person who is reported
Don'ts
Don'ts
When to file STR?
If transaction is unusual
If transaction has no economic purpose
If transaction appears illegal
Suspicion that it may involve ML/TF
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Why?Record keeping provides audit trail. It helps authorities to establish and trace the criminal or terrorist properties or funds.
How?
Provide timely information to detect irregularities and suspicious transactions
Commensurate with the nature, scale, and complexity of operations
In a manner admissible in the court of law
In a manual or automated format
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Why?A change in client’s information requires the entire processes to be repeated
Define Internal Policies, Controls, and Procedures
Carry out KYC
Screening Risk Profiling
Perform Enhanced Due
Diligence
Submit STR Record Keeping
Repeat Process
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Appointment of AML/CFT Compliance Officer
Why?The AML/CFT compliance officer oversees the setting up of an effective compliance programme and oversees all the activities related to prevention of ML/TF
ML/FT Reporting AML/CFT Programme
ManagementAML/CFT Training
and Development
Responsibilities of Compliance Officer
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Other RequirementsBoard of directors & senior managementSpearhead the AML/CFT efforts and compliance
Employee Screening
Employee’s personal and financial history to be thoroughly checked at the time of hiring and during the course of employment
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Fines and PenaltiesThe Ministry of Economy has released
a list of 26 penalties ranging from
AED 50,000 to AED 1 million and can
be doubled up to AED 5 million.
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AML/CFT Services we provide:
Documentation of AML/CFT Policy, Controls, & Procedures
Assistance in setting up of in-house AML Compliance Department
Training on Risk Profiling
Other AML related training
Assisting in AML KYC Due Diligence Software Selection
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Contact Us
https://amluae.com