Differences in AML requirements under UAE Federal Law, DIFC and ADGM Rulebooks
UAE’s battle against money laundering and other financial crimes is becoming stronger daily.
Several robust Federal and free zone regulations. Effective reporting of suspicious activities. Investigations. Prosecutions. Fines and penalties.
The country has committed to implementing strategies and policies to reduce financial crimes. It also supports global efforts of FATF and other bodies for combatting money laundering and terrorism financing.
Regarding this, the UAE has introduced regulations at a Federal AML regulation, and it’s implementing guidelines, laying down the measures regulated entities must take to combat money laundering and terrorism financing. Since Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) are financial-free zones, they have different regulations for entities operating in these areas. But still, the basis of these regulations remains the two principal Federal AML regulations of the UAE:
- Federal Decree-Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organisations
- Cabinet Decision No. (10) of 2019 concerning the Implementing Regulation of Decree-Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations
DIFC and ADGM apply the federal law as it is. Additionally, they have implemented AML-specific rules and guidance for the entities established in their respective free zones. A few differences exist between the AML compliance requirements as applicable to units in DIFC and ADGM vis-à-vis units operating in mainland UAE.
Let’s have a look at each of the AML provisions and highlight the differences:
Regulatory authority
Federal AML Regulations
Various Supervisory Authorities have been identified to regulate mainland UAE entities’ AML/CFT compliance.
Units operating in Mainland UAE | Supervisory Authority |
Financial Institutions (including insurance companies) | Central Bank of UAE |
Lawyers & Legal Consultants | Ministry of Justice |
Virtual Asset Service Providers (VASPs) in Dubai | Virtual Assets Regulatory Authority of Dubai |
Capital Market & VASP (other than Dubai) | Securities & Commodities Authority |
Other Designated Non-Financial Businesses and Professions (DNFBPs) | Ministry of Economy |
DIFC
The Dubai Financial Services Authority (DFSA) regulates, controls, and administers AML requirements in DIFC.
ADGM
The Financial Services Regulatory Authority (FSRA) enforces the rules and requirements of AML and CFT in ADGM.
Definition of DNFBP
Federal UAE
The definition of DNFBP in UAE includes the following:
- Brokers and real estate agents in relation to the buying and selling of real estate property for the benefit of its customers
- Dealer in precious metals or stones
- A law firm, notary firm, or other independent legal professionals
- Independent Accountants and Auditors
- Trust or Company Service Provider
DIFC
In the case of DIFC, the definition changes a bit. Besides the above, it includes:
- A single-family office
- A real estate developer
- Insolvency firm
This post first appeared on A Detailed Guide Of AML Compliance Requirements For Auditors And Accountants In The UAE, please read the originial post: here
