UAE: Companies issued fines of Dh450,000 each for violations

The Ministry of Economy (MoE) is conducting an extensive inspection campaign targeting establishments belonging to the Designated Non-Financial Businesses and Professions (DNFBPs) sector to ensure their compliance with the regulations approved for countering money laundering and combating financing of terrorism and illegal organisations.

DNFBP establishments were allowed three months’ time to register in the two systems and to put in place due diligence procedures that enable them to file suspicious activity reports, before the end of the grace period in the beginning of May.

The inspection campaigns detected violations committed by a number of establishments by failing to register procedures and failing to adopt the necessary measures to confront money laundering. The violations committed by a large gold trading group in Dubai amounted to Dh1,350,000. Three companies belonging to the group were issued fines of D450,000 each for violations of 8 aspects of the executive regulations.

The violations included failure to adopt necessary measures and procedures to determine crime risks in the respective field of work (Dh100,000); failure to reduce risks (Dh100,000); failure to establish internal policies, controls and procedures commensurate with the volume of its business that would enable it to manage risks (Dh50,000); failure to adopt necessary measures and procedures to reduce the identified risks according to the results of the national risk assessment or to the results of the self-assessment of the nature and volume of its work (Dh50,000); failure to take the necessary measures to understand the purpose and nature of the business relationship, or not collecting information related to this purpose or when seeking information related to this purpose when needed (Dh50,000).

Violations also included the failure to create an independent audit function to test the effectiveness and efficiency of internal policies, controls and procedures for combating crime (Dh50,000); failure to create records to save financial transactions with clients in an irregular manner that does not allow data analysis and tracking financial operations; and failure to keep records of financial transactions and the documents related thereto for a period of five years from the date of completion of the process or the termination of the business relationship with the customer or from the date of the end of the inspection process on his facilities (Dh50,000).

The Ministry of Economy called on establishments to speed up the amendment of their conditions in order to avoid penalties stipulated by Federal Law No. 20 of 2018 on countering money laundering, combating the financing of terrorism and financing illegal organizations, and its executive regulations and related decisions, which start from Dh50,000 and go up to Dh5 million. The measures could even lead to the suspension of the license or closure of the facility itself, the Ministry said, indicating that a grievance could be raised against the detected violations within the legal period specified within 15 days from the date of notification of the violation in accordance with the executive regulations of the law.

Safeya Al Safi, Director of the Anti-Money Laundering Department at the Ministry of Economy, affirmed the continuation of the ministry’s campaigns to ensure that companies comply with the provisions of the Federal Law and its executive regulations. She noted that the inspection campaigns have been designed to ensure that the sector’s establishments follow the regulations in place with regard to countering money laundering, in order to ensure the safety and transparency of transactions.

Al Safi said that registration in the approved regulations and the adoption of necessary procedures is a national duty for all DNFBP establishments, as it supports the country’s efforts to counter money laundering and combat terrorist financing at the global level. These measures enhance the country’s position across relevant global indicators and contributes to strengthening global confidence in the UAE economy. She also highlighted the Ministry’s keenness to intensify communication with DNFBPs during the coming period and follow-up on the sector’s implementation of the due diligence measures following their registration in the systems approved for this matter.