AML Compliance in the UAE: Step-by-Step Guide for Companies

Anti-Money Laundering (AML) compliance is a critical legal requirement for businesses in the UAE under Federal Decree-Law No. 20 of 2018 on AML and Combating the Financing of Terrorism (AML-CFT Law). Aligned with FATF standards, the law safeguards the UAE’s position as a global financial hub while protecting its economy from financial crime. Noncompliance can result in severe penalties, making it essential for companies to engage trusted AML consultants in the UAE. This article explains how businesses can effectively ensure AML compliance in the UAE and highlights the role of professional advisors in supporting this process.

Which Businesses Must Comply with UAE AML-CFT Regulations?

• Financial Institutions: This includes banks, insurance companies, money exchanges, and securities brokers.
• Designated Non-Financial Businesses and Professions, or DNFBPs: This includes real estate agents and brokers, auditors, accountants, law firms, trust and company service providers, and dealers in precious metals and stones.
• Virtual Asset Service Providers (VASPs): These are a broad range of businesses, including crypto exchanges, custodians, and wallet providers, that are now regulated by updated AML rules.

Key Steps for AML Compliance in the UAE

1. Risk Assessment

Every business needs to take a risk-based approach (RBA) to AML compliance. An RBA means identifying and assessing risks, then categorizing risks for customers or clients by identifying who your customer is, where they are located, the type of product or service, and the delivery channel. Businesses must have a formal AML Risk Assessment Report, appropriate for their business, which must be created, documented, and frequently updated.

2. Customer Due Diligence (CDD) and KYC

Businesses must complete Know Your Customer (KYC) procedures:

• Standard CDD: confirming identity, ownership of the entity, and operational business.
• Enhanced Due Diligence (EDD): i.e., for high-risk, politically exposed persons (PEPs), offshore company clients, or clients from high-risk regions or countries.
• Ongoing monitoring: periodic review of customer profiles and transactions.

3. Beneficial Ownership Transparency

Companies are required to confirm the Ultimate Beneficial Owner (UBO) of the business. The purpose of this process is to eliminate the misuse and laundering of assets going through corporate structures. This requirement is in parallel to the disclosure of the UBO created under Cabinet Resolution No. 58 of 2020 by the UAE.

4. Record Keeping

Businesses are required to keep records of transactions, CDD information, risk assessments, and reports for a minimum of five years. Records must be kept in a manner that can be easily accessed for inspection by the regulators, such as the UAE Financial Intelligence Unit (FIU) or the Ministry of Economy (MOE).

5. Reporting Suspicious Transactions (STR)

All suspicious transactions must be reported to the FIU using the goAML platform. Examples of suspicious transactions include:

• Transactions that don’t match customers’ profiles.
• Cash deposits that are significantly larger than normal, which cannot be explained.
• Layered or structured transactions seemingly intended to avoid detection.
• Any indication of apparent support for or evidence of terrorist financing or avoidance of sanctions.

6. Appointments of Compliance Officer

Companies must appoint a money laundering reporting officer (MLRO) or compliance officer to oversee internal controls, file suspicious transaction reports (STR), and engage with regulators.

7. Staff training and awareness

All employees, especially front-line staff, must receive continuing education regarding AML requirements. The training should equip employees to spot warning signs, understand reporting obligations, and make effective use of compliance tools.

AML Reporting & Registration in the UAE

All DNFBPs and relevant companies must be registered with the Ministry of Economy’s AML Portal.  The process entails:

• Company information is submitted for AML registration.
• Appoint a compliance officer.
• Gain access to the goAML system, which is used to report to authorities.
• If you do not register, you will be penalized with AED 50,000.

How AML Consultants in the UAE Help Businesses Ensure Compliance?

Our expert team provides broad AML-compliance solutions for businesses, including:

• AML Policy: Developing internal manuals and controls around your business model.
• Risk Assessment & GAP Analysis: Identify the weaknesses and confirm compliance with the Federal Decree-Law No. 20 of 2018.
• AML Registration & goAML Setup: Helping to register your firm with MOE and filing its reports.
• Compliance Officer Outsourcing: Stepping in as your firm’s appointed MLRO if required.
• STR Filing Support: Providing advice in preparing and filing suspicious transaction reports.
• Employee Training: Providing tailored AML training sessions for Employees and Management.
• Ongoing Advice & Monitoring: Providing ongoing updates to help businesses remain compliant with changing AML regulations.

To effectively meet AML requirements and ensure compliance, businesses are advised to seek the expert services of trusted AML Consultants in the UAE. Contact us today, and we shall be glad to assist.