The United Arab Emirates (UAE) is a global center for international trade and finance. The country has multiple free trade zones, which attract large businesses but also pose money laundering and terrorist financing issues. In this guide, you can find comprehensive information about AML in Abu Dhabi, which is the capital of the UAE.
The UAE has strict AML rules and regulations in place to keep these concerns at bay. Companies formed in the Abu Dhabi Global Market (ADGM) Free Zone must comply with the Anti-Money Laundering and Combating Financing Of Terrorism (AML-CFT) Law. The ADGM AML-CFT rule book applies to both financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs), such as precious metals and precious stone dealers, real estate brokers, lawyers, auditors, and trust and corporate service providers.
ADGM companies must follow AML rules such as building a strong AML-CFT framework, hiring an AML Compliance Officer / Money Laundering Reporting Officer (MLRO), giving staff training, and so on. In addition, the AML framework and rules must be reviewed at least once a year.
What is an Abu Dhabi Global Market AML Rule Book?
The AML Rule Book was created by the ADGM Authority to serve as a single point of reference for all organizations regulated and controlled by the ADGM Regulator. The Rule Book provides the standards for Anti-Money Laundering and Sanctions compliance for all ADGM companies. The ADGM AML Rule Book also takes into account the fact that different companies have various AML risk profiles.
Apart from comprehending the degree to which the clauses relate to them, all ADGM firms are expected to read and comply with the provisions listed in the Rule Book. The ADGM AML Rule Book, however, should not be considered in isolation from UAE AML law or worldwide standards established by the Financial Action Task Force (FATF).
General AML Compliance Requirements with ADGM
To avoid money laundering, an ADGM firm must create and maintain strong AML-CFT policies, processes, systems, and controls. The following conditions should be met by such an AML policy or framework:
- Adherence to UAE Federal AML Legislation
- The AML framework must allow for the discovery and reporting of suspicious persons and transactions
- The company should be able to offer a transaction audit trail
- The company should ensure that any other AML duties are met
- Ensure that all workers are adhering to the AML rules, procedures, systems, and controls
Special Court for Crimes Related to Money Laundering
The UAE enacted a resolution in 2020 to establish a new court with a specific focus on money-laundering offenses. The court will be held in Abu Dhabi, and judges and prosecutors specialized in money laundering and tax evasion charges will get specific training. A new AML court will aid the UAE's efforts to tackle money laundering offenses.
How to Stay Compliant
Policy Review on Anti-Money Laundering Once a Year
A corporation is required to examine the efficacy of its AML policies, processes, systems, and controls at least once a year. The yearly AML policy review in the ADGM can be performed internally by the company's internal audit team or outsourced to third-party audit companies in the UAE. The following items must be included in the AML policy review:
- A sample testing of customer documents related to an evaluation of the sufficiency of the company's duty customer risk assessment or Customer Due Diligence (CDD)
- An examination of all Suspicious Activity Reports identifying any areas where processes or AML training might be enhanced.
- A review of the Governing Body's and Senior Management's degree of accountability and supervision to verify the organization has adopted and maintained effective controls.
Customer Due Diligence
According to the Anti Money Laundering and Sanctions Rules and Guidance (VER0 7 . 27 0922 ), a Relevant Person who is an Authorised Person or a Recognised Body is required to carry out CDD under Rule 8.3.1 where the Relevant Person
1. establishes a business relationship with a customer;
2. carries out an occasional Transaction for a customer that is of an amount equal to or more than USD15,000;
3. suspects a customer of, or a Transaction to be for the purposes of, money laundering; or (4) doubts the veracity or adequacy of any documents or information previously provided by, or obtained for, a customer in relation to (1), (2) or (3) above.
Appointing an ADGM Money Laundering Reporting Officer (MLRO)
A corporation that is obliged to satisfy ADGM AML responsibilities must appoint an MLRO. The MLRO must have adequate seniority, experience, and independence to carry out the function responsibly. The MLRO should be able to implement and supervise the company's compliance with the Rules in the ADGM AML Rulebook. An ADGM company's MLRO should also satisfy the following requirements:
- The MLRO must be a UAE citizen.
- An individual appointed as the MLRO of a DNFBP with one officer, partner, or principal may be the same person as the DNFBP's officer, partner, or principal. However, prior permission from the regulator is required.
- The MLRO of an ADGM Representative Office must be the same person who holds the position of Principal Representative of that Representative Office.
Anti-Money Laundering Solutions
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