Under the UAE Anti- Money Laundering (AML) Law, Financial Institutions and Designated Non-Financial Business Professionals (DNFBPs) are required to appoint a Compliance Officer who shall be responsible for compliance with the implementation of Federal Decree-law No. (20) of 2018 On Anti Money Laundering and Combating The Financing Of Terrorism, and Article (11) Cabinet Decision No. (58) of 2020 Regulating the Beneficiary Owner Procedure..
A Compliance Officer has been defined as a natural person employed or appointed by a legal person (an entity), with appropriate competence and experience, and tasked with undertaking on behalf of the legal person (the entity) to provide all relevant data, procedures, and obligations that are prescribed by the Law to fulfill the requirements of Anti -Money Laundering (AML) legislation..
A Compliance Officer is expected to be experienced and competent in carrying out the duties as required by Law.
Duties of A Compliance Officer under the UAE AML Law
The responsibilities of a Compliance Officer under Section 8, Article 21, can be summarized as follows:
- To detect transactions relating to crime,
- To review, scrutinize and study any data received concerning suspicious and take decisions either to report to the Financial Intelligence Unit (FIU) or to continue with the transaction and reasons for such findings must be stated.
- To evaluate, review internal rules and procedures relating to combating crime, regularly update the rules, and ensure they align with the regulation.
- To prepare rules and regularly submit reports on the rules to the management and relevant supervisory authority.
- To develop and organize training programs for the Legal person’s employees on regulations and industry practices on Money Laundering and the financing of terrorism and financing of illegal Organizations and the means to combat them.
- To collaborate with the supervisory Authority and Financial Intelligence Unit to provide them with all requested data.
From the above, it is clear that the duties of a Compliance officer under the UAE AML Law are into two folds; a Compliance Officer has obligations to the entity to whom he or she is employed and a responsibility to the Government.
A Compliance Officer’s duty to the Government
A Compliance Officer ensures that the legal person complies with regulatory and statutory requirements stipulated by the Government and report transactions which are suspicious transaction to the Financial Intelligence Unit (FIU).
A Compliance Officer’s duty to the employer under the UAE AML Law
A compliance officer, under the UAE AML Law, is required to help the entity identify and assess possible compliance risks it may be exposed to due to the nature of the business or its size and put in place measures to mitigate such risks.
A Compliance Officer under the UAE AML Law is expected to formulate internal policies and rules for the entity and ensure that all the entity’s employees strictly follow those rules by ensuring good conduct and strict compliance.
A Compliance Officer evaluates and reviews the entity’s already existing internal rules and implements them among the employees. A Compliance Officer is required to constantly conduct research on established laws and update them to reinforce the entity’s compliance program to ensure non -violation of the rules in the UAE.
A Compliance Officer under the UAE AML Law is also required to conduct due diligence programs by ensuring that the legal person identifies and verifies its client or the Beneficiary Owner in line with the provisions of the Federal Decree..
A Compliance Officer is also required to report Suspicious Transactions without delay if there is a reasonable ground to suspect that a transaction or attempted transaction constitutes a crime. A Compliance officer must submit Suspicious Transaction Reports (STRs) to the Federal Intelligence Unit through the goAML system.
Suspicious Transactions (STs) under the UAE AML Law have been defined as “Transactions related to funds for which there are reasonable grounds to suspect that they are earned from any felony or misdemeanor related to the financing of terrorism or of illegal organizations, whether committed or attempted.
From the above, a Compliance Officer must ensure that the entity has a quality and effective AML program and must understand the nature of their employer’s business to identify areas where regulatory violations may occur. Therefore, a Compliance Officer is a regulatory expert for the entity who is expected to know all the regulatory issues and applicable laws with respect to the entity, identify any risk of non-compliance, and find out ways to reduce or completely remove those risks.
The role of a Compliance Officer under the UAE AML program is significant, as such entities rely on a Compliance Officer’s expertise to ensure that they do not face regulatory risks. Thus, a Compliance Officer should be up to date with the legislation guiding the business of his or her employer.
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Article 21 Cabinet Decision No. (10) of 2019, Circular No. 1-2021 MOE AML Department.pdf (economy.gov.ae)
Cabinet Decision of No. 10 of 2019
Decision No. 58 of 2020