Role of Financial & Intelligence Unit under UAE Anti Money Laundering Law
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The Role of the Financial and Intelligence Unit (FIU) under the UAE Anti-Money Laundering Law

As part of the UAE Government’s effort and commitment to combating money laundering and the financing of terrorism and illegal organizations in the country, the Government has established appropriate legislative, regulatory, and institutional frameworks to detect, prevent and deter money laundering and financing terrorism. Under the UAE Anti -Money Laundering (AML) frameworks, various institutions are established to enforce compliance with the law by all entities concerned in the UAE. Among such institutions is the Financial Intelligence Unit. 

History and Establishment of the Financial Intelligence Unit under the UAE Anti Money Laundering Law

The History of the Financial Intelligence Unit in the UAE dates back to 1998 when the Central Bank of UAE established a particular unit to investigate fraud and suspicious transactions. The particular Unit was to protect the UAE from the risk of money laundering and terrorism financing activities. In the year 2002, the Unit was renamed Anti-Money Laundering and Suspicious cases Unit (AMLSCU). When the Federal Decree-Law No. 20 of 2018 on Anti Money Laundering and Combating Financing of Terrorism and Financing Illegal Organizations came to force, Anti -Money Laundering Suspicious Cases Unit (AMLSCU) was further renamed the Financial Intelligence Unit. 

According to the UAE Anti -Money Laundering Law, the Financial Intelligence Unit’s main headquarter shall be in the State’s capital. They may open branches within Central Bank branches in the Emirates of the State.  Under the UAE Anti -Money Laundering law, they are required to operate independently to carry out their functions under the law. The Central Bank shall provide it with the necessary technical, financial, and human resources to discharge its duties under the UAE Anti-Money Laundering laws.

Read More… Your Duties as an Auditor Under the UAE Anti- Money Laundering Law

The function of the Financial Intelligence Unit under the UAE AML

The UAE Government established the Financial Intelligence Unit as part of its robust Anti-money Laundering regulation. The FIU operates as the national center to receive Suspicious Transactions Reports (STRs) and other information related to the crime of suspicious transactions..

Powers of the Financial Intelligence Unit under the UAE Anti-Money Laundering Law

According to UAE Anti Money- Laundering Law, the Financial Intelligence Unit has powers to do the following;

  • Establish Financial Unit Departments and internal regulations on procedures for approval by the Central Bank’s Board of Directors. These internal regulations shall include procedures to ensure the competency, integrity, and confidentiality on the part of its employees;
  • Establish a database to store any information it has and secures the information by establishing rules that govern the security and confidentiality of data;
  • Provide courses and programs to train and develop the employees working in it and any other authority inside or outside the State;
  • To conduct research and statistic related to crime both domestically and internationally and follow up on such research and studies;
  • Prepare an annual report about its crime combatting activities that includes specifically general analysis on Suspicious Transaction Reports

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The Financial Intelligence Unit’s Duty with regards to Suspicious Transaction Report under the UAE Anti- Money Laundering Law

According to the UAE Anti-Money Laundering Law,   the UAE Financial Intelligence Unit shall carry out its duties with regards to the Suspicious Transaction Report as follows:

  • It Receives Suspicious Transaction Reports relating to crime from entities on its approved templates 
  • It studies, analyzes Suspicious Transaction Reports and stores them in its database
  • It requests entities and Relevant Authorities to provide any additional information that the FIU might deem necessary to perform its duties relating to Suspicious Transaction Reports
  • It provides the entities with analysis results of the information provided in the reports received to enhance the effectiveness of measures for combating crime and detecting STRs.
  • It cooperates and coordinates with Supervisory Authorities by disseminating the outcome of its analysis specifically concerning qualities of Suspicious Transaction Reports to ensure the compliance of entities with the procedures for combating crime. 
  • It sends data relating to the reports, the outcome of its analysis to the Law Enforcement Authorities when there are sufficient grounds to suspect that there is a crime.
  • It provides judicial authority information relating to the crime it can obtain from foreign Financial Intelligence Units, spontaneously or upon request.

From the above, the UAE Financial Intelligence Unit (FIU) analyses suspicious transactions and activities involving money laundering and terrorism financing from the data and reports received from entities.

You should know: Filing Suspicious Transaction Reports (STRs) by DNFBPs under the UAE Anti- Money Laundering Law

Analysis method adopted by the Financial Intelligence Unit under the UAE AML

The Financial Intelligence Unit under the UAE Anti- Money Laundering Law analyses available report and information from the entity in two ways as follows;

  • Operational Analysis

The Federal Intelligent Unit uses available and obtainable information to identify specific targets such as persons, funds, criminal networks to track activities or specific transactions. The FIU then determines the links between those targets, activities, or transactions and the potential proceed of crime.

  • Strategic analysis

 The Financial Intelligence Unit uses available and obtainable information, including data provided by Relevant Authority, to identify trends and patterns of the crime.

The Financial Intelligence Unit (FIU) under the UAE Anti – Money Laundering Law uses the goAML, an integrated system to receive, analyze, and distribute suspicious transaction reports (STRs) quickly and efficiently, in large numbers.  The United Nations Office on Drugs (UNODC) developed the goAML system to combat money laundering and the financing of terrorism. 

The Financial Intelligence Unit under the UAE International Legislative Framework

The Intelligence Unit is required under the UAE Anti- Money Laundering regulations to carry out its international duties by exchanging information and reporting the outcome of its analysis on the information on Suspicious Transaction Reports (STRs) with its counterpart in other countries.  FIU may also exchange any additional information to which the Federal Intelligent Unit has the power to access to whether directly or indirectly under international agreements to which the State is a party or any memorandum of understanding signed by the UAE Federal Intelligent Unit with its international counterparts. Any such information shall only be used to combat crime and shall not be disclosed to third parties without the Federal Intelligence Unit’s permission. 

In conclusion, it is clear that under the UAE Anti Money Laundering Law, the Financial Intelligence Unit encourages collaboration and strategic partnerships with local, regional, and international stakeholders having similar goals of combating money laundering and related financial crimes.

Call us today with any questions relating to the roles of the Financial Intelligence Unit under the UAE Anti Money Laundering Law.

References:

M. Al Khairy, LL.B., has extensive experience in providing legal advice to the firm’s business clientele. His primary area of practice is corporate law, covering a variety of aspects such as commercial transactions, property, trade, administrative, and litigation.
He is a high-calibre expert with technical knowledge and industry experience, which is why the firm is able to provide incisive advice corporate clients need. Al Khairy is also highly experienced in undertaking procedural formalities and providing counsel pertaining to company liquidation. Read more