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The DFSA supervises and regulates 434 entities, 328 Authorised Firms, 87 DNFBPs, 17 Registered Auditors and 2 Authorised Market Institutions.

Anti-Money Laundering, Counter-Terrorist Financing and Sanctions Compliance

Money laundering and terrorist financing can destabilise communities, economic sectors, or whole national economies. Criminals and terrorist networks may be able to carry out their criminal and potentially destructive activities through undetected financial support structures.

The DFSA is committed to maintaining a supervisory regime that acts as a significant deterrent to any criminal elements, including money launderers and persons wishing to assist, in any way, acts of terrorism.

The DFSA’s supervisory regime for Anti-Money Laundering, Counter Terrorist Financing  (CTF) and Sanctions Compliance applies to:

• an Authorised Firm other than a Credit Rating agency;
• an Authorised Market Institution;
• a DNFBP; and
• an Auditor
collectively referred to as Relevant Persons.

The DFSA commits to keeping its regulatory regime in line with the standards set by key international standard-setters including the Financial Action Task Force (FATF).

The AML Module of the DFSA Rulebook contains all of the DFSA requirements on Anti-Money Laundering, Counter-Terrorist Financing and relevant sanctions in one module.  It has been designed to provide a single reference point for Relevant Persons.  The various obligations and requirements set out in the AML Module takes into consideration that different Relevant Persons have different AML risk profiles. Therefore it is important for Relevant Persons to familiarise themselves with the AML Module and assess the extent to which the Rules apply to them.

The requirements and obligations contained in the AML Module include:

Senior Management Responsibility: The senior management of a Relevant Person is ultimately responsible for compliance with the AML Module. In carrying out their responsibilities every member of a Relevant Person’s senior management must exercise due skill, care and diligence.      
                              
Anti-Money Laundering policies and procedures: Relevant Persons must establish and maintain effective Anti-Money Laundering policies, procedures, systems and controls designed to prevent opportunities for money laundering in relation to the Relevant Person and its activities.

Money Laundering Reporting Officer: Relevant Persons must nominate a person as the Money Laundering Reporting Officer (MLRO). This person must be an individual who is ordinarily resident in the United Arab Emirates.

Risk Assessments and Customer Due Diligence: Relevant Persons must conduct risk assessments of their business and customers.  The findings of these assessments should be used to determine the level of Customer Due Diligence (CDD) that should be undertaken.  Generally, CDD is information and documents obtained about a customer and may assist a DNFBP to mitigate any AML risks identified with undertaking business with a customer.

Suspicious Activity Reports (SAR): Where a Relevant Persons or one of its employees knows or suspects, or has reasonable grounds for knowing or suspecting that a person is engaged in or attempting money laundering, terrorist financing it must report the matter internally to its MLRO.  The MLRO must investigate and where required submit an SAR to the AMLSCU, and notify the DFSA. 

AML Training and Awareness: Relevant Persons must provide AML training to all relevant employees at appropriate and regular intervals. This training should be tailored to the level of exposure to AML risks and issues.

Reporting Requirements to the DFSA: Relevant Persons are required to submit an Annual AML return to the DFSA.  This return covers how the Relevant Person has complied with its AML obligations and is due 4 months after the end of the Relevant Person’s financial year end.

Federal AML Laws and Bodies   

The AML Module of the DFSA Rulebook cannot be read in isolation from relevant UAE legislation.  The UAE criminal law applies in the DIFC and, therefore, persons in the DIFC must be aware of their obligations in respect of criminal law as well as these Rules contained in the AML Module of the DFSA Rulebook.  Relevant UAE criminal laws include Federal Law No. 4 of 2002 regarding the Criminalisation of Money Laundering, Federal Law No. 1 of 2004 regarding Combating Terrorism Offences and the Penal Code of the United Arab Emirates. The Rules in the AML Module of the DFSA Rulebook should not be relied upon to interpret or determine the application of the criminal laws of the UAE. Any criminal investigation and resulting penalties would be performed by UAE authorities.

The legislation referred to above can be found using the below links:

• Federal Law No. 4 of 2002 regarding criminalisation of money laundering (Arabic);
• Federal Law No. 4 of 2002 regarding criminalisation of money laundering (English); and
 Decree by Federal Law No 1 of 2004 on combating terrorism offences. Please refer to page 16 for the English translation.