Go AML

The process of money laundering occurs when criminals conceal the original owner and source of criminal proceeds from illegal acts, including drug trafficking, embezzlement, arms sales, and cybercrime. To utilize such proceeds in legal and illicit activities, they must make them appear to come from a legitimate source.

Money laundering can have harmful effects, which may be exacerbated by weak enforcement of anti-money laundering laws and the absence of effective executive authorities. When specialized authorities in a given country are negligent, this can create an ideal environment for money launderers and criminals to carry out their illicit activities with ease and at scale.

The dangers of money laundering include:

• Crime and corruption are widely spread and noticeable
• Negatively affecting the economy by harming the private sector
• Bad reputation globally
• Imposing international sanctions

• The first stage of money laundering is called “Placement”: At this stage the money launderer smuggles cash across countries to invest in foreign financial institutions for trading or buying rare, expensive, minerals, precious stones and other products or holding that are iconic for their high price. This includes antiques which can be resold with checks or bank transfers, in addition to other ways such as splitting huge amounts into small amounts and making direct deposits in bank accounts.

• “Layering” is the second stage of money laundering process: In layering stage many layers of complex financial operations are forged to separate the illicit funds from their original source in order to hide the true source of these returns, which make it difficult for the supervisory and law enforcement authorities to track and audit these transactions.
• The last stage of money laundering process is “Integration”: Illegal proceeds are introduced into the financial system under the guise of legal earnings from legitimate economic activity. This provides a legal cover for the previously illegal funds, making it more difficult to distinguish them from legally obtained money. Money launderers can then invest these funds in legitimate activities, presenting an opportunity to increase their wealth through seemingly lawful means.

Defined as per the law No. 7 of 2014 as providing, preparing, collecting or facilitating funds for others to obtain them with the intent of use then in committing a terrorism crime, is considered one of the most dangerous means of spreading crime and corruption.

• Founded by the G7 (or Group of Seven) in 1989 and headquartered in Paris.
• The organization has many international organizations and regional offices, such as MENA FATF for Middle East and North Africa Affairs.
• FATF has developed 40 recommendations, which are considered an international standard that countries implement in line with their own circumstances.

• Identifying risks, developing policies and local coordination.
• Tracking money laundering, terrorist financing and weapons proliferation activities.
• Giving powers and responsibilities to the competent authorities, such as law enforcement and supervisory authorities.
• Providing the required information about the ultimate beneficial owners (UBO) of companies and legal and natural persons
• Work to issue protective measures for the financial sector and the target sectors. Work to promote international cooperation.

The disclosure limit is the maximum limit of cash that is allowed to be brought to the country. If you exceed this limit, you will be subject to a disclosure system that is controlled by the central bank.

• Money laundering depends on the dirty money gained from the crime contrary to the source of funds for the terrorist financing, which might be licit and collected to be directed for terrorist activity.  The customer type: the money launderer is a professional in what he is doing. As for the terrorist financier, he often does not know that he is financing a terrorist act.

• Money volume: money laundering has huge amounts that may belong to one person, unlike terrorist financing, which has small amounts belonging to many people (donations money, for example).
• The money path: In money laundering, the money path is circular as the money starts/ ends from/ to the launderer, but in terrorist financing, it is linear, starting from the donors and ending with the terrorist.

It is a system for transferring money from one geographical region to another without inserting to the financial system, which leads to a lack of control over it. In 2020, a decision was issued by the Central Bank to make it mandatory to license the Hawala activity, to be controlled and monitored, to mitigate the risks of this activity. Therefore, our clients are requested to verify the legitimacy of the persons or organizations they deal with so that they are not involved in unintentional money laundering.

Natural persons who are or have been entrusted with prominent public functions in the State or any other foreign country, such as Heads of States or Governments, senior politicians, senior government officials, judicial or military officials, senior executive managers of state-owned corporations, and senior officials of political parties and persons who are, or have previously been, entrusted with the management of an international organization or any prominent function within such an organization. The definition also includes the following: Direct family members (Of the PEP, who are spouses, children, spouses of children, and parents). Associates are known to be close to the PEP, which includes:
– Individuals having joint ownership rights in a legal person or arrangement or any other close business relationship with the PEP.
– Individuals having individual ownership rights in a legal person or arrangement established in favor of the PEP.

The risk of politically exposed persons is in the possibility of using their positions to launder or smuggle money or facilitate participation in any financial or terrorist crimes.

Anyone who is engaged in the following trade or business activities shall be considered a DNFBP:

• Brokers and real estate.
• Dealers in precious metals and precious.
• Independent accountants & auditors.
• Legal consultancy.

Company service providers. (Only licensee who have one or both of the activities of Corporate Services Provider/ Documents Clearing Services will be able to establish companies on behalf of others.)

DPMS is considered a high-risk activity for the following reasons:

• The ease of trade in diamonds around the world, as well as its small size, ease of transport and high price, make it one of the most threatening gemstones as a factor in money laundering.
• The high value of gold and the retention of its value regardless of its shape, whether in the form of gold artefacts or metal ingots, make it at the forefront of precious metals used in money laundering and terrorist financing.

CSP is considered a high-risk activity for the following reasons:

• Acting as an agent for establishing companies on behalf of others.
•  Work and equip another person to work as a manager or secretary for a company or as a partner or in a similar position in a legal person without identifying the ultimate beneficial owner.

Independent accountants, auditors and legal consultancy are considered high risk activities because of running the following activities:

• Establishing companies with a complicated structure to hide the relation between the crimes’ income and the criminals.
• The purchase and sale of properties, where the transfer of the ownership is used in the layering stage as well as in the integration stage, through legal investments after the money laundering process.
• Making financial transactions on behalf of their customers, such as depositing or withdrawing cash, buying and selling shares, or sending and receiving international funds transfers.

Designated Non-Financial Businesses and Professions (DNFBPs) are defined by FATF as:

• Real estate agents
• Dealers in precious metals or precious stones
• Dealers in any saleable item of a price equal to or greater than USD 15,000
• Lawyers, notaries, other independent legal professionals and accountants.

This refers to sole practitioners, partners or employed professionals within professional firms. It is not meant to refer to internal professionals that are employees of other types of businesses, nor to professionals working for government agencies, who may already be subject to AML/CFT measures.

• Executing a series of operations to conceal the illegal source of funds. These operations can be classified under the layering stage.
• Investment in large projects, such as tourist complexes, to give a legitimate appearance (the integration stage).
• Buying and selling real estate in fake names.

No, as it’s not mentioned as one of DNFBPs.

DPMS is considered a high risk activity for the below reasons:

• The ease of trade in diamonds around the world, as well as its small size, ease of transport and high price, make it one of the most threatening gemstones as a factor in money laundering.
• The high value of gold and its retention of its value regardless of its shape, whether in the form of gold artifacts or metal ingots, makes it the forefront of precious metals used in money laundering and terrorist financing.

Independent accountants, auditors and legal consultancy are considered high risk activities because of running the below activities: Establishing companies with a complicated structure to hide the relation between the crimes’ income and the criminals.
The purchase and sale of properties, where the transfer of the ownership is used in the layering stage as well as in the integration stage, through legal investments after the money laundering process.
Make financial transactions on behalf of their customers, such as depositing or withdrawing cash, buying and selling shares, or sending and receiving international funds transfers.

DNFBPs must comply with the law of anti-money laundering and combating the financing of terrorism and financing of illegal organizations by implementing the requirements of the ministry of economy as below:

• Appoint an expert compliance officer.
• Rely on the official website of the committee for goods and material subjected to import & export control to obtain the most recent publication of the local lists issued by the UAE cabinet.
• In addition, subscribe to the email subscription service provided in the website in order to receive relevant updates to both the UNSC consolidated lists and the local lists.
• Register for goAML program. goAML is an integrated platform used to file Suspicious Transaction Reports (STRs) and/or Suspicious Activity Reports (SARs)

There are no fees for registrations. The companies can register thru simple steps on the website of the ministry of economy.

An existing licensee is already registered for goAML after the awareness campaign, which ended on April 30th 2021.  Fines will be imposed by the Ministry Of Economy for those who don’t comply with the requirements before the campaign’s deadline. The new licensees should comply with the requirements once their license has been issued to avoid being imposed any fines.

AED 50K is a minimum fine, and it may duplicate to AED 5M and company cancellation

Ministry of Economy.

• Federal Decree No. (20) of 2018 on anti-money laundering and countering the financing of terrorism.
• Cabinet Decision No. (10) of 2019 concerning the implementing regulation of decree law no. (20) of 2018 on anti- money laundering.