Contributing to global anti-money laundering efforts and combating financing of terrorism (AML/CFT), the United Arab Emirates (UAE) strives to fully implement the standards set by the International Financial Action Task Force (FATF). The UAE government passed a new regulation on Anti-Money Laundering (AML) and Combatting the Financing of Terrorism (CFT), through Federal Decree No. 20 of 2018. The law came into force in 2019 through a cabinet decision and has been implemented comprehensively in the UAE. The National Committee on AML/CFT has the mandate of overseeing the law implementation under the National Action Task Force.

The Law aims to develop and implement a legal structure for the nation. The goal is also to ensure compliance with international standards on AML and CFT.

It will enable the country to achieve the following objectives:

  • Combatting the money laundering practices.
  • Establishing a framework and practices for concerning authorities to combat anti-money laundering.
  • Countering the Financing of Terrorism activities.
  • Effective measures against suspicious organizations.

The AML/CFT law holds any person or entity guilty of money laundering offense if the person or entity is involved intentionally in certain activities, including but not limited to:

  • Transferring or converting the proceeds of crime with an intention to hide or conceal its illicit origin.
  • Concealing or disguising the true nature, origin, and way of disposition related to any proceeds.
  • Acquiring, processing, or using any such criminal proceeds.
  • Assisting any person who is a preparator of such money laundering practices in any way.

The current law has adopted the international standards on AML and CFT regulations as stipulated by international bodies such as the FATF, which conducts regular reviews of anti-money laundering and countering terrorism financing activities for different regions. The current version of the AML law in the UAE has substantially improved the AML/CFT regulatory environment in the country.

Implications for Businesses in the UAE

The UAE authorities have been actively cooperating with international organizations including the FATF. The current law on the AML and CFT has adopted stricter measures to follow the international standards. Businesses in the UAE that meet the definition of Designated Non-Financial Businesses and Professions (DNFBPs) need to assess themselves and implement the AML/CFT obligations mentioned in the law and register with the goAML system of the Financial Intelligence Unit. Businesses will also need to register with the Committee of Commodities Subject to Import and Export Control System for an automatic reporting system of the sanction list.

As per the current regulation, DNFBPs required to register with the goAML and the automatic reporting system for sanctions have been designated as five broader categories of businesses:

  • Brokers and Real Estate Agents
  • Dealers in Precious Metals and Stones
  • Independent Auditors and Accountants
  • Providers of Corporate System
  • Legal Consultancy Firms

DNFPs will need the following documents to register with the goAML portal:

  • A copy of commercial registration for companies.
  • Authorization letter from the company.
  • Valid Emirates ID card copy, visa, and Passport.
  • Download the Google Authenticator App for password management.

The Ministry of Economy has issued a stern warning on failure to register and other violations via the Cabinet Resolution (16) of 2021 which includes a list of the violations. DNFPs can face a fine of AED 50,000 to AED 1 million. The fine can increase up to AED 5 million.

Compliance with AML and CFT laws for Businesses

Regulatory authorities are issuing stricter instructions for all DNFBPs regarding AML and CFT practices. Consequently, DNFPs must develop effective risk assessment and compliance plans.
They can take the following major steps for AML/CFT risks mitigation and compliance:
  • Register for the SACM and goAML portals
  • Internal Policies and Controls
  • Customer Due Diligence
    • Including Occasional Transactions
    • Establishing a business relationship
    • Reporting Exceptional transactions
    • Reporting the Politically Exposed Persons (PEPs)
    • High-Risk Transactions requirements
  • Suspicious Transaction Reporting
  • Implementation of Governance Model
    • Appointment of Compliance Officer
    • Independent Audit Function
    • Staff training and Screening
    • Assigning roles and responsibilities of all staff including top management
  • Record Keeping
    • Including Transaction recording
    • Customer Information
    • Business types and Information
    • Ongoing monitoring of business relationships
    • Suspicious Transaction Reports

We are here to help you with the latest compliance requirements on the UAE anti-money laundering and countering for finance terrorism law.

We can help you understand and develop an effective compliance framework with the following key features:

  • Review of existing compliance structure.
  • Organization and designing of the new compliance framework.
  • Internal controls and policies on combating financial crimes.
  • Assessment of compliance with the AML and CFT regulations.
  • Know Your Customer (KYC) services and consultation.
  • Advisory on AML/CFT compliance planning.
  • Assistance with AML Registration

We recommend all DNFBPs to implement the AML/CFT obligations immediately.

You can find more information on the AML/CFT Regulations here. You can also contact us at

comliance@cztaxaccounting.ae
for any assistance.

Disclaimer: This article is for your information only and should be used together with the AML regulations.