The combating of money laundering
The combating of money laundering and the financing of terrorism has, in recent years, become a global challenge and a declared criminal activity in most countries. As a committed member, the United Arab Emirates (UAE) contributes to global anti-money laundering efforts and combating the financing of terrorism (AML/CFT) and strives to implement fully the standards set by the International Financial Action Task Force (FATF).
Money Laundering is defined as “any financial or banking transaction aimed at concealing or changing the identity of illegally-obtained funds by passing them through the financial and banking system to make them appear as originating from legitimate sources, and then investing them in a legal manner contrary to their real nature.”
The LFIs – Licensed Financial Institutions, DNFBPs – Designated Non-Financial Business and Professions, Insurance companies, RHPs – Registered Hawala Providers and their employees must adopt the highest standards of AML-CFT Compliance Culture.
We set the tone for a strong AML culture that comes from the top with a transparent risk appetite methodology to set the expectations for the organization and its commitment to AML CFT. Our ongoing compliance monitoring program ensures that your organization covers all AML activities, clearly articulated and subject to independent review.
The importance is AML Training; the employee must understand the “what” and the “why” of AML Compliance, especially regarding their activities. We provide AML training from the beginner to senior management with tailored training materials and ensure the employees keep aware of AML threats.
The United Arab Emirates – Risk Assessment Program defines that as identifying your organization’s risk before setting up the compliance procedures. Our experts will assess and identify your organization’s risk and apply RBA – Risk-Based Approach to ensure that measures to prevent or mitigate money laundering and terrorist financing are commensurate with the risks identified. The FATF – Financial Action Task Force and UAE Authorities say the RBA approach is an essential foundation for the Anti Money Laundering Compliance Culture.
- Customer Risk;
- Product / Service Risk;
- Jurisdictional Risk or Country Risk; and
- Delivery Channel Risk or Interface Risk.
Risk management is the process of identifying risk and developing policies and processes to minimize and manage that risk. This requires the development of a process to identify, assess, prioritize, mitigate, manage and monitor risk exposures. Please connect to our experts for the ML/FT Risk Assessment advisory.
Enterprise-Wide Risk Assessment (EWRA)
Risk-based approach (RBA) is an essential part of Risk Management. RBA was highlighted especially for money laundering risks in the 2012 FATF Recommendations i.e., …. “Should apply a risk-based approach (RBA) to ensure that measures to prevent or mitigate money laundering and terrorist financing are commensurate with the risks identified.” and was also a significant concern implemented in the fourth European AML Directive.
Risk management refers to identifying potential risks to measure, evaluate, record, mitigate and monitor threats to reduce the impact of such risks on the organization’s business. The Risk Management function must recognize the range of business risks and mitigate them effectively.
We are specialized in conducting the Enterprise-Wide Risk Assessment in the following areas;
- Operational Risk
- Market Risk
- Counterparty Risk
- Compliance Risk
- Reputational Risk
- Security Risk
- Money Laundering/Terrorist Financing Risk
The assessment helps businesses to adapt their approach to managing risks to meet the demands of the evolving financial corporate standards.
With the result of Inherent Characteristics, we help you develop AML/CFT policies, procedures, and controls which is the vital pillar of the Compliance Program.
Financial Institutions, DNFBPS, and RHPs must have a comprehensive AML/CFT policy based on their ML/FT risk assessment by national and international guidelines, which is the basic foundation of its compliance function. The AML/CFT policy must clearly define the roles and responsibilities of the Manager in Charge, Compliance Officers / MLROs, Compliance Committee, and employees regarding AML/CFT compliance. The AML/CFT policy must provide for regular and timely reporting to the Board of Directors (or to the Owner/Partners where there is no Board of Directors) regarding ML/FT risks and the culture/values to be adopted within the business of the reporting entity to prevent money laundering, terrorist financing, and related crimes.
An effective AML/CFT policy and procedures must be based on the UAE’s existing AML/CFT Laws, Regulations, Notices, and Standards, as well as international best practices and guidance notes from the FATF, MENAFATF, EGMONT Group, and other similar bodies. Our team will assist in preparing, reviewing, and updating all applicable Laws, Regulations, Notices, Standards, and other international best practices and make them effective in mitigating the existing and emerging ML/FT risks.
We ensure that the AML/CFT Policy must affirm the roles and responsibilities of the Board of Directors (if any) and of the Owner/Partners/Shareholders in implementing a robust AML/CFT Program across the Licensed Person business, we also guide the employees to follow. At the same time, they carry out their day-to-day responsibilities to ensure that ML/FT risks are mitigated in the day-to-day operations of the reporting entity.
AML Software with Sanction Screening & PEP Screening
As a part of the KYC process and ongoing monitoring, all reporting entities must be used effective AML Software with the sanction screening and PEP screening tool to identify the potential matches. Locating your prospective client and the business’s ultimate beneficial owner is essential.
A more robust compliance screening tool can integrate with the official lists and produce real-time results. Sanctions can be listed by global authorities such as UN Security Council (UNSC), The European Union (EU), the United Kingdom Her Majesty’s Treasury (UK-HMT), and the Office of Foreign Assets Control sets sanctions from the US. As a member of the UN, the United Arab Emirates (UAE) is committed to implementing the United Nations Security Council Resolutions (UNSCRs), including those related to UN sanctions regimes. Consequently, through the Cabinet Resolution No. 74 of 2020, the UAE is implementing UNSCRs on the suppression and combating of terrorism, terrorist financing & countering the financing of proliferation of weapons of mass destruction, in particular, targeted financial sanctions (TFS) regimes as defined by the UN.
We provide the best sanction screening matrix solution from the reputed global service providers with the lists of;
- Politically Exposed Person (PEP)
- Foreign Politically Exposed Person (FPEP)
- Head of International Organizations (HIO)
- Sanctions Lists (1800 lists from global like OFAC, UNSC, EU, FINTRAC, AUSTRAC, etc.)
- Sanctions Control & Ownership (SCO)
- Other Official Lists (OOL)
- Other Exclusion Lists (OEL)
- Enhanced Country Risk (ECR)
- Special Interest Person (SIP)
- Relative or Close Associate (RCA)
- Adverse Media Entities (AME)
- State Owned Companies (SOC)
- And others.
Our screening software provides the additional features of UAE Local Terrorist List integration, Internal watch list, white list/good guy lists, and dual good monitoring facilities.
The functions can be controlled by the Compliance Officer / MLRO to increase the screening percentage to identify the targeted matches with the search logic of Precise / Near / Broad.
Guidance For the Setup Compliance Team
We assist you in building your compliance team as per the regulatory expectations with the concept of five elements;
Designing the AML/CFT Policies, Procedures, and Controls:
The AML/CFT Policy will be designed according to the business activity to be easily understood to maintain compliance while performing job functions. The procedure and controls will be validated regularly, and the policy will be updated with the recent AML/CFT laws.
Designating a Compliance Officer, Compliance Committee & Audit Committee:
A compliance Officer will be assigned to verify the day-to-day Anti Money Laundering compliance program to prevent, detect, and report non-compliance matters.
The committees will conduct regular meetings to evaluate the effectiveness of the Compliance Department, system, and procedures. The recommendations will be reported with the meeting minutes to the board of directors/shareholders/partners/owner.
Training and Awareness
Regular training will be arranged for the key members and senior management to achieve the robust Anti Money Laundering Compliance Culture within the organization. Employees should understand that the company wants them to do the right thing, and compliance improves the company and keeps it from getting entangled in lawsuits or regulatory actions.
Independent Audit, Monitoring, and Reporting
Compliance programs are not “one size fits all” – they must be customized. Our audit team will conduct an independent audit to identify the key risk areas within your organization and design a comprehensive compliance framework with necessary recommendations. It is not only identifying the gap. Our experts will continue monitoring the Anti Money Laundering Compliance implementation so that your esteemed organization achieves the best AML practices in the region.
Identify, Assess, and Corrective Action
Developing a method for tracking and responding to compliance issues, thoroughly documenting and investigating, enforcing corrective action, and tracking the resolution of complaints are effective ways to address offenses. Acting promptly to detect violations and taking appropriate disciplinary action is pertinent to maintaining an effective compliance program.
Workforce Supply For the Compliance Function
We take care of your Anti Money Laundering Compliance with our professionals. Our company provides well-experienced Compliance Executives to handle your AML Compliance queries such as;
- KYC verifications
- Sanction Screening of Involved parties
- Risk Assessment of the client
- Conduct Enhanced Due Diligence
- Ongoing monitoring
- Document Management
- Record Retention Procedures
Compliance Training Program
Anti-money laundering (AML) is mainly used in the financial, non-financial, and legal industries to describe the legal controls that require regulated reporting entities to prevent, detect, and report money laundering activities. The nature of the services and products offered by the organization (namely managing, controlling, and possessing money and property belonging to others) means that it is vulnerable to abuse by money launderers.
We provide AML training to those who work within the regulated financial sectors, non-financial sectors that require Anti Money Laundering Compliance and their Senior Management, AML/ Compliance Professionals/MLROs, Auditors, Consultants, Analysts, Lawyers, Insurance Companies, Precious Metal Dealers, and Accountants.
We arrange a convenient and results-oriented program AML training course based on adult learning. The facilitator will give plenty of input and help participants make sense of the themes through discussion and practice. It incorporates short inspiring demonstrations, case studies, presentations, and much training to enhance learning. There will be ample time for Q&A and discussions with ‘return to work’ action planning. The course will reinforce key concepts within an inspiring and engaging learning environment.
Targeted Training Areas
- Why the Current Focus on AML/CFT?
- Introduction to Money Laundering & the Financing of Terrorism
- The complex and interrelated risks concerning money laundering and sanctions
- The International Community’s response to AML and CTF
- Establishment of FATF and its fight against money laundering and terrorism financing Customer policies and procedures
- International Legislation and legislation applicable to your jurisdiction
- The broader context for financial crime risk and regulation in which your firm operates
- The role and responsibilities of (Front /Back Office/ AML / compliance officer) and how these fit within the financial crime risk-management life cycle
- AML/CTF laws and regulations Internal Controls, Procedures, and Policies
- Cooperation with the Authorities and the Regulators
- Identifying suspicious transactions
- Internal and external reporting of suspicious transactions
- Identifying high-risk indicators, understanding what to do with the information, and whom to escalate it to the role of the MLRO
- The importance of record keeping Responsibilities of firms/banks and individuals Identification techniques
- Money Laundering Detection Techniques
- Prevention, Detection, and Due Diligence Early-Warning Mechanisms
- Designing money laundering and terrorist financing risk assessments Applying KYC & Customer Due Diligence (CDD & EDD)
- Risk Management of Politically Exposed Persons (PEPs) Screening
- Market Abuse and Insider Dealing Sanctions
GoAML & Reporting
The goAML system was developed by the United Nations Office on Drugs and Crime (UNODC) to combat money laundering and the financing of terrorism. It is considered an integrated system used by the Financial Intelligence Unit (FIU) to efficiently analyze and distribute suspicious transaction reports (STRs). Many financial intelligence units worldwide are using it, and the United Arab Emirates is the first Gulf country to apply this modern system.
The financial institutions (FIs) and designated non-financial businesses and professions (DNFBPs), and Registered Hawala Service Providers (RHP) were required to register on the goAML portal and file Suspicious Transaction Reports (STRs) and Suspicious Activity Reports (SAR). Adilzone Corporate Services LLC offers services and support to
facilitate goAML registration and reporting for their clients, ensuring a
smooth and hassle-free compliance process.
The UAE Financial Intelligence Unit (FIU) analyses suspicious transactions and activities involving money laundering, terrorism financing, and related criminal activities based on data and reports that collaborate and share knowledge to detect and act against such actions.
Dealers in Precious Metals & Stones (DPMS) Reporting: About the Federal Decree-Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and financing of criminal organizations, and The powers to issue instructions granted by Article (44) Section 2 of Cabinet Decision No. (10) of 2019 Concerning the implementing regulation of decree law no. (20) of 2018 on anti-money laundering and combating the financing of terrorism and criminal organizations, the following transactions must report to the GoAML platform as ‘Dealers in Precious Metals and Stones Report’ (DPMSR).
- Transactions with resident individuals – Cash transactions equal to or exceeding AED 55,000
- Transactions with non-resident individuals – Cash transactions equal to or exceeding AED 55,000
- Transactions with entities/companies – transactions equal to or exceeding AED 55,000 in cash or through wire transfer.
Also, the records of all documents related to transactions must be maintained for five years.
We provide an automated reporting solution for the DPMSR transactions with a systematic KYC Process, Risk Assessment, Screening verifications, and centralized document management. It will be your comprehensive tool for regulatory audit purposes.
An independent AML audit is a fact-finding process. It is not a financial audit but a test to see whether the organization has an appropriate Anti Money Laundering Compliance program. The AML Audit will be conducted by on-site visit and off-site as well.
This Internal Audit charter aims to ensure better management of an enterprise by improving its governance, risk management, management controls, and compliance with the Ministry of Economy, Central Bank of UAE, UAE Federal Government, and Global Competent authorities.
Our objective is to bring a systematic, disciplined approach to evaluating and improving the effectiveness of the risk management, controls, and governance process.
The scope of work of Internal Audit encompasses the examination and evaluation of the adequacy, existence, and effectiveness of the system of internal control, risk management framework, and corporate governance of the organization, which includes;
- Evaluation of the effectiveness of the AML Policy, Procedures, and Controls
- Evaluation of the effectiveness of the Transaction Monitoring Function
- Evaluation of the effectiveness of sanction screening controls
- Analyzing reports prepared by the Compliance department / MLRO / Compliance Officer
- Effectiveness of training given to the front-line executives and Senior Management
- ML/TF Risk Assessment
- CPD Training Completion level of Compliance Department staff
- Quality testing of Suspicious Transaction Report and Suspicious Activity Report
- Record Retention
- Changes adopted by the Compliance Function in line with the latest regulatory findings
An AML audit ensures that the organization has comprehensive internal policies, procedures, systems, and controls. This can be broken down into three key components – side-by-side walkthroughs to observe how functions work in practice and testing to determine whether procedures have been followed. Interviews with relevant persons to gauge personal knowledge, as well as the culture of compliance in the firm.
We will conduct the quality and effectiveness Internal Audit on the organization’s internal control, risk management, and governance system and processes, thereby helping the Board of Directors / Shareholders/partners/Owner and Senior Management protect their organization and its reputation. Furthermore, our Internal Auditor will use risk-based approaches to determine their work plans and actions. Please connect for a free consultation and book your gap analysis audit.