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Enforcement, Cryptocurrency and Best AML Practices Discussed at Creative Zone’s Anti-Money Laundering Session

As the UAE government has tightened its control over Anti Money Laundering Activities in the region, making the laws stricter and more regulated. Dubai’s leading business advisory firm, Creative Zone, recently organised a virtual session to develop a better understanding among business owners and professionals about the AML law, the importance of AML measures and best practices to adopt to prevent financial crimes.

The live session, which is now available on YouTube, was moderated by Lorenzo Jooris, CEO, Creative Zone. The panellist comprised- Hala Bou Alwan, founder, Hala Bou Alwan Consultancy, Malcolm Wright, Chief Compliance Officer, 100x Group, and Zeeshan Anwar Toor, General Manager, Creative Zone Tax & Accounting.

In the hour-long session, Halal Bou Alwan began by stressing the government’s commitment to making the UAE a safer financial destination, as the Middle East has a wide range of international and local banks with a global presence that conducts a variety of money services, combined with global trading hubs and geographical proximity to unstable or sanctioned locations. The UAE now has a National Committee for Combating Money Laundering and the Financing of Terrorism and Illegal Organisations, NAMLCFTC, that provides capacity building and technology assistance to companies.

Finance expert Zeeshan Toor explained that companies have become more cautious and vigilant about illicit activities in the past two years and the steps his team at Creative Zone adopt to assist companies in becoming AML compliant by regularising and streamlining their tax and accounting practices. He further described the various measures and processes that companies can adopt to proportionate the risks of money laundering, including Customer due diligence, Transaction monitoring, screening, and appointment compliance officer.

“Companies need to assess risks from a money-laundering perspective and apply policies to mitigate those risks. Senior management involvement is very crucial in implementing these policies and developing the right culture throughout the company. Equally important is to train the employees, closely monitor and update the internal infrastructure as per any updates in the legislation.” Said Zeeshan Toor.

“It is critical to carry out the ongoing obligations effectively and immediately report any suspicious transactions/activity. It is advised that sanctions lists from both the Office of Foreign Asset Control and the United Nations Security Council must be regularly checked and compared with client lists. ” Added Zeeshan.

The webinar also underlined the importance of- Know Your Customer (KYC), Know Your Supplier (KYS) and Know Your Employees (KYE). As they now have stricter regulations and requires a deep and thorough due diligence to be done more frequently. Furthermore, all applicable companies must also conduct an Anti-Money Laundering risk assessment that includes their employees, management, services, and all other aspects of the business.

The Anti-Money Laundering regulations apply to all financial institutions, Designated Non-Financial Businesses and Professionals (DNFBPs) and Non-Profit Organisation DNFBPS are the following four types of companies:

  • Brokers and real estate agents
  • Dealers in precious metals and precious stones
  • Lawyers, notaries, and other independent legal professionals and independent accountants
  • Providers of Corporate Services and Trusts 

Malcolm Wright explained that the increase in the usage of cryptocurrencies and their fast-growing role in the financial world is one of the biggest reasons such regulations are more required than ever before. As technology improves, the safety standards for digital financial security simultaneously changes. He also touched upon technological advancements in the financial industry. His ‘A-F’ list of technological advancements includes:

  • Automating processes
  • Big data
  • Cognitive computing
  • Distributed ledger
  • Enhanced access
  • Fingerprinting

Creative Zone answers some FAQs on Anti- Money Laundering Law

Creative Zone Tax and Accounting, a member of the Creative Zone Group, provides expert Assurance, Tax and Advisory services to companies and empower them to make informed business decisions, while meeting their tax, accounting and compliance responsibilities.

How to clarify ambiguities surrounding registration qualification for goAML?

The law describes the four type of companies that qualify as a DNFBP, anyone falling under these would needs to be registered and have appropriate policies. If certain activities are ambiguous, then it has to be assessed on a case to case basis. However, if the company does certain activities as mentioned, then more likely than not, they will have to get registered. In case of any further ambiguities, it is recommended to get professional assistance.

What are the proper steps to be followed by a compliance officer when boarding a Politically Exposed Person (PEP)?

The law now clearly separates Foreign PEPs from Local PEPs. Foreign PEPs are automatically categorised as high risk and calls for enhanced due diligence. The compliance officer must request further documents, information, and proof of concept. The KYC must also be updated more frequently. Local PEPS, on the other hand, are not automatically categorised as such.

What sort of changes do corporate service providers need to make to comply with the law?

The first step is to identify the various risks the company is open to from an Anti-Money Laundering perspective. Then they need to mitigate those risks. An ongoing change that needs to be made is having an appropriate customer due diligence process in place depending on the client’s risk level. These companies also need a compliance officer to check regulations, update policies and train employees constantly. The most crucial step is to register on the goAML system to avoid fines and violations before the deadline of 31st March, 2021

Can the company owner be the compliance officer, or does another individual have to be appointed for that specific role?

It is not set in the law that a separate person has to be appointed as the compliance officer. The law simply requires that the individual have the right qualifications and can conduct and implement all the required policies on time. The officer must also identify any suspicious activity and report it to the appropriate authorities. However, the compliance officer needs to be independent as per Anti-Money Laundering regulations.

What are the punishments if a company does not report its clients’ financial crimes?

There can be huge repercussions depending on how long the company had known about the crimes without reporting them. Apart from heavy penalties, the employees can be terminated or suspended from their job, license suspension or cancellations are also possible.

Can one person be the compliance officer for two different entities?

While there is no specific law that bars the possibility, there should not be any conflict of interest. For example, if one of the companies is regulated by Dubai Financial Services Authority (DFSA) and the other is regulated by the Emirates Securities and Commodities Authority (ESCA), the officer must notify both authorities. Then they will analyse the possibility of a conflict of interest. The law also allows outsourcing and one compliance officer’s option for two companies, but a conflict of interest must not arise.

Anti-Money Laundering Registration Deadline-31st March

To ensure your business is AML compliant, write to Creative Zone at [email protected] or Call on +971 4 407 0570 for more details.


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