Summary

SUMMARY

DFSA approach to Anti-Money Laundering, Combating the Financing of Terrorism and Counter Proliferation Financing

Money laundering, terrorist and proliferation financing can destabilise communities, economic sectors, or national economies. Criminals and terrorist networks may be able to carry out their criminal and potentially destructive activities via a multitude of mechanisms and structures by transforming the proceeds of illicit activities into legitimate money.

The DFSA as a supervisory authority is committed to maintaining an Anti-Money Laundering (AML), Combating the Financing of Terrorism (CTF) and Counter Proliferation Financing (CPF) regime that acts as a significant deterrent to any criminal elements, including money launderers and persons wishing to support, in any way, acts of terrorism and proliferation of weapons of mass destruction.

The DFSA is the competent authority for the administration of Federal AML, CTF and CPF legislation as it applies to Relevant Persons in the DIFC, which means it has sole administrative oversight and direct supervision of Relevant Persons for compliance with the AML, CTF and CPF legislation, including the DFSA’s AML, CTF and Sanctions Rules.

Please keep in mind: This material is intended only as informal guidance, is not intended to be all encompassing and is not any form of, and must not be relied upon on any basis whatsoever, as legal or other advice or directions. Although the DFSA does regularly consider AML, CTF and CPF matters, the information on this page may not always be current, complete or accurate. You should consider whether any relevant laws, regulations, rules, directives, standards or other requirements may apply to you. The DFSA’s informal guidance is no substitute or compensation for, or mitigation of, your responsibility to comply with AML, CTF and CPF legislation.

The DFSA is committed to maintaining this page as a useful and valuable resource to Relevant Persons. Should you have any comments, feedback on the contents of this page or suggestions for further topics, please do not hesitate to contact the DFSA via the Supervised Firm Contact Form available on the DFSA e-Portal.

UAE National Committee

The National Committee for Combating Money Laundering and the Financing of Terrorism and Illegal Organisations (NAMLCFTC) was established in 2000 to oversee anti-money laundering policies and efforts in the UAE. Specifically, the Committee serves to enhance the effectiveness of AML/CTF and CPF framework in the UAE by ensuring continuous adherence to international standards related to combating money laundering and terrorist financing crimes. The DFSA is a member of the UAE National Committee.

For more information, please refer NAMLCFTC website.

UAE AML Executive Office

The UAE Cabinet approved the establishment of the Executive Office of the Anti-Money Laundering and Countering the Financing of Terrorism (the AML Executive Office) in February 2021. It was established to oversee the implementation of the UAE’s National AML/CTF Strategy and National Action Plan (NAP), the programme of reforms designed to strengthen the UAE’s anti-financial crime system. Its overarching objective is to enable and better equip the UAE in building a strong and sustainable AML/CTF structure.

The Executive Office’s responsibilities include: (i) improving national and international coordination and cooperation on AML/CTF issues at policy and operational levels; and (ii) tackling money laundering and terrorist financing threats by working with regional and international groups, such as the Gulf Cooperation Council Working Group on AML/CTF, G20, and the Financial Action Task Force.

The Executive Office will carry out its mandate in conjunction with the UAE NAMLCFTC and the Ministry of Foreign Affairs and International Cooperation.

UAEIEC Executive Office

The UAE Cabinet issued resolution number 3/99 of 2009 establishing the Committee for Goods and Materials Subject to Import and Export Control with an affiliated Executive Office (the UAEIEC Executive Office) to act as communication channel with other countries and international bodies concerned with control on exports. In 2019 & 2020, the UAE, by way of Cabinet Decision, enhanced its mechanism for implementing targeted financial sanctions related to proliferation of weapons of mass destruction and terrorist financing. The enhancements are set in Cabinet Decision No. (74) of 2020 Regarding Terrorism Lists Regulation and Implementation of UN Security Council Resolutions.

For more information, please refer UAEIEC Executive Office website.

Applicability

The DFSA’s supervisory regime for AML/CTF/Sanctions compliance applies to:
• Authorised Firms other than a Credit Rating Agency;
• Authorised Market Institutions;
• Designated Non-Financial Businesses or Professions (DNFBPs); and
• Registered Auditors,
collectively referred to as Relevant Persons.

Please keep in mind, the responsibility for a Relevant Person’s compliance with the Anti-Money Laundering, Counter-Terrorist Financing and Sanctions Module (AML) of the DFSA Rulebook lies with every member of its senior management.

Designated Non-Financial Business or Professions (DNFBPs)

Money launderers and terrorist financiers are continuously looking for new methods of disguising their illicit funds; they will actively seek to exploit weaknesses in AML systems and controls and will gravitate to countries and financial systems with weak or ineffective AML, CTF and CPF controls. Importantly, it is not only the financial sector which is at risk of misuse by money launderers and terrorist financiers, but the non-financial sector (DNFBPs) is also vulnerable. DNFBPs can be misused to provide channels for money laundering, financial crime, and terrorist financing and proliferation financing operations.

A DNFBP is a Person who is not an Authorised Person or a Registered Auditor, and is carrying on a business or profession listed below in or from the DIFC:

• a real estate developer or agency which carries out transactions with a customer involving the buying or selling of real property;
• a dealer in precious metals or precious stones;
• a law firm, notary firm or other independent legal business;
• an accounting firm, audit firm or insolvency firm;
• a Single Family Office; or
• a Company Service Provider.

With regard to Company Service Providers, this is a Person that provides any of the following services to a customer by way of business:

• acting as a formation agent of legal persons;
• acting as (or arranging for another person to act as) a director or secretary of a company, a partner of a partnership, or a similar position in relation to other legal persons;
• providing a registered office, business address or accommodation, correspondence or administrative address for a company, a partnership or any other legal person or arrangement; and/or
• acting as (or arranging for another person to act as) a nominee shareholder for another person.