Hi everyone. Welcome to the third episode of the profound forecast. Today we have a special guest with us, the vibrant legal advisor of profound business service, Ms. Rana Banu. We’ll be discussing an essential subject impacting businesses today in the UAE, which is anti money laundering, or AML. 

To start with, could you explain what anti money laundering is and why it is so important for businesses today, particularly in the UAE? 

Absolutely. Before I delve into what is anti money laundering is, it’s very important to understand the term money laundering. So money laundering, it’s a process by which criminals seek to disguise their true source of income.

And the true identity and make it appear legitimate. Then they make use of these illicit proceeds to fund criminal activities like terrorist financing and proliferation financing. And as you’ll know, UAE has been a tax haven country for several years.  And it has invited investors from all over the world, which in fact has boosted its economy.

But at the same time, UAE has been under the surveillance of the global anti money laundering watchdog, the FATF’s gray list. It was due to the implementation of the anti money laundering regulation that the UAE has come out of this gray list. So coming back to what is anti money laundering is. These are a set of rules and regulations to prevent the criminals from disguising illegally obtained fund as legitimate income.

And there has been several checks and controls on the business activities in the UAE that fall under the purview of AML supervision. And it is mandatory for all such businesses to ensure that they comply with the AML regulations. 

Recently, there have been significant developments in AML regulations in the UAE. Can you discuss some of the key initiatives and changes the UAE has implemented to strengthen its AML framework? 

Certainly. The UAE has been proactive in enhancing its AML regulations to align with the global standards. And as I mentioned before, this proactive approach only has made UAE to come out of the gray list countries.

Speaking with regard to some of the key initiatives, which the UAE has implemented to strengthen AML framework includes robust regulations and rules and procedures, surveys, inspections, including the national risk assessment to identify the vulnerabilities in the financial system. Secondly, the central bank has issued updated AML and countering of terrorist financing guidelines.

which has mandated stricter compliance. Thirdly, UAE is closely working with the FATF to ensure compliance with the global AML standard. When it comes to the setting up of new entities and businesses in the UAE, the government has set up the EOCM, which is the executive office for control and non proliferation.

To coordinate the national effort. And lastly, when speaking with regard to the implementation of the AML regulations, there has been a notable increase in the penalties and enforcement action against those entities and individuals who are found to be violating this AML regulations. The  UAE is also leveraging its advanced technologies to improve transaction monitoring.

And detect suspicious activities more effectively. And there is also this portal called as the GoAML portal of the UAE, which act as an interface between the UAE and the Financial Intelligence Unit, wherein all the reporting entities, the stakeholders, and also the supervisory bodies can submit suspicious reports to the FIU. So these are some of the initiatives taken up by the UAE government. 

Those are really impressive steps. How does Profound Business Service help its clients comply with these stringent AML regulations in the UAE? 

Profound offers comprehensive AML compliance solutions tailored to the UAE’s regulatory environment.

We help you to identify whether your activity falls under the AML supervision, help you draft the internal AML policy, which is mandated by law, help you get your business registered for the UAE’s GoAML portal, provide you the training, the materials, and also the guidance and support for the AML compliance.

Our aim is to help our clients navigate through the complex regulatory landscape and ensure robust systems are in place to prevent money laundering, as well as protect our clients. from being imposed with fines and penalties with regulations are constantly evolving. 

How can businesses stay updated on the latest AML requirements in the UAE?

Staying updated requires a proactive approach. So businesses should regularly review and update their AML policies, participate in the training sessions, which are conducted by the respective Government authorities subscribe to the newsletters, blog posts, et cetera, which is posted by the regulatory authorities from time to time.

At Profound, we offer continuous support and updates to our clients to help them stay compliant. 

What are the consequences for businesses in the UAE that fail to comply with AML regulations?

Noncompliance can result in severe consequences, including hefty fines, penalties, and even cancellation of the trade license.

In fact, the fine ranges from 50, 000 dirhams to 500, 000 dirhams. So it’s, it’s very important and essential for the businesses to take the AML compliance. Seriously to avoid such hefty fines and penalties. 

Finally, what advice would you give to businesses just starting to develop their AML compliance in the UAE?

To sum up, it is very crucial to start with a thorough risk assessment to understand your specific vulnerabilities, the risk that you are exposed to in conducting that particular activity in the UAE. Secondly, it is to develop clear policies, procedures, and controls, and importantly, internal AML compliance.

Thirdly, it’s very important to appoint a qualified MLRO or money laundering reporting officer within your organization, which is mandated by the law as well. And fourthly, it is very important to invest in training your staff, especially the frontline staffs and the second-line staff for efficient transaction monitoring and report.

It’s, it’s very. Crucial to foster a culture of compliance within your organization. 

Thank you for joining us on our podcast today. Until next time, stay informed, stay inspired, hit subscribe and stay profound.