EGRC Your compliance is our obligation.

Get Consultation

(+97) 1 6535-0561

ANTI MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM

Table of Contents

What is Money laundering?

Criminal becomes greedy, in this process large amount of money  generated from criminal activities such as corruption, gambling, fraud, drug trafficking, crypto currency, reselling assets,  embezzlement, illegal arms, insider trading, bribery, and computer fraud schemes sale by converting it into a legalized source. It’s a crime in many countries as per there law with varying definitions.

There are three stages of money laundering

  1. Placement: The legitimate money bring into process of financial system. This can be done through activities such as depositing cash into bank accounts, purchasing assets, or using money transfer services. :
  2. Layering: The layering stage involves obscuring the trail of the funds through a series of complex transactions, often across multiple accounts or jurisdiction.
  3. Integration: Finally, in the integration stage, the laundered funds are mixed with legitimate assets or investments to make them appear as lawful income.
AML TF

History of Anti Money Laundering (AML)

Generally, Anti-Money Laundering refers to the legal activities or processes of the financial institutions that prevent illegally obtained money from entering into the financial system of the economy. The term of AML closely related to the Counter-Financing of terrorism (CFT) which financial institution use to combat terrorist.

Countering financing of terrorism and AML

Counter-terrorist financing (CTF), or combating financing of terrorism (CFT), works as stopper to the supply of illegal money to the terrorist organizations. The core component of the integral-strategies to fight against the terrorism is countering the financing of terrorism.

 Terrorist organizations produce their money from verity of legalized sources around the world, such as legitimate businesses employ sophisticated techniques or through criminal activities to move the money between jurisdictions with the help of state-sponsors.

Multiple countries and organizations established the global Financial Action Task Force (FATF) in 1989. Mission of this FATF is to promote international slandered to stop money laundering.

AML and combating terrorist financing also included into the mandate of the FATF after its expansion.

International Monetary Fund (IMF) established to ensure the stability of international monetary system. 189 countries are its members.IMF is concerned about the effects of the related crimes and money laundering on the stability of the economy at broader level and on financial section.

Terrorist financing and money laundering

Criminals and terrorist exist globally, collection or provision of legal, or legitimate, or black, or dirty money with the intension, used for the support of terrorist organizations and the purpose behind that any kind of terrorist activities is terrorist financing.

The process of costume a legitimate source of money and the use of that for illegal purposes is money laundering. These funds are used for terrorist financing and also used by criminal organizations and invested into their legal businesses. Uncountable amount of money not included in official financial documentation to avoid from the taxes.

Terrorist financing activities can take various forms, including

  • Fundraising
  • Virtual currencies and online platforms
  • State sponsorship
  • Trade-Based Money Laundering
  • Extortion and Kidnapping

Anti money laundering guidelines

Anti-money laundering (AML) guidelines are a set of rules and recommendations designed to prevent the illegal process of concealing the origins of illicitly obtained money. AML guidelines help financial institutions and businesses detect and deter money laundering activities, ensuring the integrity of the financial system. These guidelines typically include the following key elements:

  • AML Compliance Programs
  • International Cooperation
  • Technology and Data Analysis
  • Penalties and Enforcement
  • Risk Assessment
  • Transaction Monitoring
  • Ongoing Monitoring and Reporting
  • Technology and Data Analysis
  • Penalties and Enforcement

Anti money laundering laws and regulations

Anti-money laundering (AML) refers to the set of laws, regulations, and procedures implemented to prevent and detect the illegal process of disguising the origins of illicitly obtained money. It is a comprehensive framework designed to combat money laundering, terrorist financing, and other financial crimes that threaten the integrity of the global financial system.

The ultimate goal of AML efforts is to deter criminals from using the financial system for illicit purposes, protect businesses and individuals from the harmful effects of financial crimes, and preserve the integrity of the global economy.

Money Laundering in United Arab Emirates (UAE)

Money laundering in the UAE refers to the illegal process of disguising the origins of illicit funds to make them appear legitimate within the country’s financial system. The United Arab Emirates (UAE) recognizes the importance of combating money laundering and has implemented robust measures to prevent, detect, and prosecute such activities.

The UAE has enacted comprehensive anti-money laundering laws and regulations to align with international standards and combat financial crimes effectively. The primary legislation governing money laundering in the UAE is Federal Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT Law)

In 2002, the UAE Central Bank issued the first AML regulations, requiring banks to implement customer identification procedures and report suspicious transactions. Subsequently, in 2007, the UAE enacted Federal Law No. 4 on the Criminalization of Money Laundering, criminalizing money laundering activities and establishing penalties for offenders.

The UAE also collaborates internationally to combat money laundering, participating in information sharing and cooperation initiatives. The country is a member of the Financial Action Task Force (FATF), an intergovernmental organization that sets global standards for AML/CFT. The UAE actively engages in implementing FATF recommendations and aligning its regulatory framework accordingly.

Anti Money laundering in UAE

Anti-money laundering (AML) efforts in the United Arab Emirates (UAE) focus on preventing and combating the illegal activities associated with money laundering. The UAE has implemented a robust framework to detect and deter money laundering activities, aligning its measures with international standards and best practices.

The UAE actively participates in international efforts to combat money laundering. It is a member of the Financial Action Task Force (FATF) and works closely with other countries and organizations to strengthen AML measures and promote information sharing and cooperation.

Anti Money Laundering Dubai

AML (Anti-Money Laundering) in Dubai refers to the measures and regulations put in place by the government and financial institutions to combat the illegal activities of money laundering and terrorist financing within the Emirate. Dubai, being a global financial hub and an attractive destination for businesses and investors, recognizes the importance of maintaining a transparent and secure financial system.

goAML in United Arab Emirates

goAML, a sophisticated anti-money laundering (AML) reporting platform developed by the United Nations Office on Drugs and Crime (UNODC), has been implemented in the United Arab Emirates (UAE) to enhance the country’s AML regulatory framework.

The UAE has a history of prioritizing AML measures to safeguard its financial system. The implementation of goAML in the UAE can be traced back to 2014 when the UAE joined the UNODC’s goAML initiative. The platform was adopted to enhance the quality and efficiency of AML reporting and information exchange within the UAE.

Security and Commodity Authority regulation in UAE

The Securities and Commodities Authority (SCA) is the regulatory body overseeing the securities and commodities markets in the United Arab Emirates (UAE). The SCA is responsible for implementing and enforcing regulations to promote fairness, transparency, and investor protection within the UAE’s financial markets.

The SCA works in conjunction with other regulatory authorities, such as the Central Bank and the Financial Intelligence Unit, to ensure compliance with anti-money laundering (AML) regulations within the securities and commodities sectors.

Anti Money Laundering law in UAE

The United Arab Emirates (UAE) has enacted comprehensive laws and regulations to combat money laundering and ensure compliance with international standards. The main legislation governing anti-money laundering (AML) in the UAE is Federal Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT Law).

The AML/CFT Law in the UAE imposes obligations on various entities, including financial institutions, designated non-financial businesses and professions (DNFBPs),

and other relevant entities. These entities are required to implement robust AML measures to prevent money laundering and the financing of terrorism.

Compliance with AML regulations in the UAE entails several key elements:

1.Risk-Based Approach: AML compliance in the UAE emphasizes a risk-based approach, where entities assess and mitigate the money laundering and terrorist financing risks they face.

2.Regulatory Oversight: Regulatory authorities in the UAE, such as the Central Bank, Securities and Commodities Authority, and Insurance Authority, oversee and enforce AML compliance.

3.Record-Keeping: Entities are obligated to maintain accurate records of customer transactions, customer due diligence information, and supporting documentation. These records should be kept for a specified period and made available for inspection by regulatory authorities upon request.

4.Suspicious Transaction Reporting: Entities must establish systems and processes to detect and report suspicious transactions to the relevant authorities.

5.Internal Controls and Compliance Programs: Entities must establish and maintain effective internal controls, policies, and procedures to ensure compliance with AML regulations.

Conclusion

In conclusion, the fight against money laundering and terrorism financing requires a comprehensive approach. Anti-money laundering measures, including customer due diligence, transaction monitoring, and reporting, play a crucial role in detecting and preventing these illicit activities. By implementing robust AML frameworks and remaining vigilant, financial institutions and regulatory bodies can contribute to safeguarding the integrity of the financial system and combating the threats posed by money laundering and terrorism financing.

Have Any Question?

To enquire about insourcing AML Compliance Department you can contact us

Categories

Subscribe Our Newsletter

Stay up-to-date on the latest news, tips, and trends in accounting, auditing, and anti-money laundering.

EGRC Your compliance is our obligation. webp

EGRC Your compliance is our obligation.

Quick Links

Work Hours

Our office hours are from 9 am to 6 pm, Monday through Saturday.

Copyright © 2023. EGRC Consultants, All rights reserved.