UAE is an international business destination and so, the government and concerned authorities are strict in the financial sector. The issuance of violations and fines support UAE’s effort in combating financing or terrorism and money laundering. The Ministry of Economy has issued a list of violations and administrative fines to overcome this issue.
The violations connect to the business activities and DNFBPs ministry supervises which combat money laundering and terrorism financing according to the provisions of Federal Decree-Law no 20 of 2018.
The major business categories include,
- Auditors
- Corporate service providers
- Brokers and real estate agents
- Dealer of gemstone and precious metals
The ministry called on such companies to enhance their awareness on risk of money laundering and stay aligned with the government’s efforts.
Grace Period for registration
As a first step, the ministry recommends businesses to register on the financial intelligent unit (goAML) and also, on the committee for commodities that handle export and import control system or (Automatic reporting system for sanctions list).
Following up these two registrations, the businesses should understand and meet all the provisions of its decree-law, regulations and decisions.
Now, the grace period for registering in these two systems has been extended till March 31st. Companies who fail to do so, will be subject to penalties including, closure of facility and suspension of license. The company should complete their post-registration procedures to avoid additional financial penalties.
The fines range from Dh 50,000 to Dh 1 million and it can be doubled up to Dh 5 million.
List of penalties and fine amount
The cabinet resolution included three penalties with a fine of Dh 1 million, they are
- Dealing with fake banks,
- Opening or maintaining accounts in fake banks,
- Failure to take action on clients listed in the international or domestic sanctions lists and continuing to have a business relationship,
Again, the list included five penalties with a fine of 200,000 Dh for issues like
- Failure to take correct measures to manage high risks,
- Failure to notify the financial information unit in case of a suspicious transaction when it’s not possible to take the correct measures before establishing a relationship with them,
- Failure to respond to the financial information unit in case of suspicious transaction
- Direct or indirect disclosure to the customer on the suspicion of the nature of business with them
- Failure to implement the measures of National committee to combat with money laundering
The list included seven violations with a fine of 100 thousand Dh
- Failure to take measures to determine the risk of crime in one’s field of work
- Failure to assess risk while undertaking new professional practices
- Failure in taking due diligence measures before establishing a business relationship or carry out the process that benefits a client.
- Failure to verify with documents or data from reliable and independent source, Verify the identity before establishing a business relationship
- Delay in informing the financial information unit in case of a suspicious transaction report, in any grounds if the client is linked with the crime in whole or in part.
- Failure to consider due diligence measures towards politically exposed clients before establishing a relationship with them.
- Failure to create records and keep track of financial transactions
The list included eleven violations with a fine of Dh 50,000
- Failure to take necessary measures to identify risk according to national risk assessment
- Failure to set procedures, internal policies, and controls aimed at combating the crime
- Failure to manage low risk with simplified measures
- Failure to understand the nature and purpose of business relationship
- Failure to understand the nature of client’s business, ownership structure of their business, and the client’s control over it
- Failure to take measures for continuous monitoring during the business relationship
- Failure to find a compliance officer
- Irregular maintenance of financial transactions that doesn’t allow data analysis and tracking of financial operations
- Failure to keep records for a period of five years from the date of completion or termination of business relationship
- Failure to provide information related to customers and results of continuous monitoring of data analysis, records, files, correspondence, documents, and forms to concerned authorities upon request.
- Failure to train employees on countering money laundering and terrorism financing
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