It was comparatively easier to conceal the income generated as a result of criminal activities in the 90s. Offenders used different strategies to launder their finances, such as opening various entities and assigning an overrated prices for their products and services. 

The UAE is a significantly younger developing country, compared to others, and to develop certain Anti-money laundering (AML) and Combating the Financing of Terrorism (CFT) protocols, it has to adopt frameworks, based on best existing practices. As we know, the UAE has been and remains one of the most attractive grounds for business and funds from all over the world.

In this article, we will discuss the system which the UAE government has adopted to regulate the flow of financial means into the country. This system has been named the «goAML» platform.

In 2019, the UAE launched the goAML platform and became the first country in the GCC region to do so. Originally, the United Nations Organisation was the initial founder of the goAML system which was further integrated with FIU’s (Financial Intelligence Units).

What is the Financial Intelligence Unit?

It is a governmental body of a country that performs functions of analyzing and identifying:

• Suspicious transactions
• Any information that relates to money laundering
• Any sort of finance offenses, such as terrorism financing

Additionally, the FIU gathers relevant information from reporting departments and is authorized to process financial and other data to be able to deliver its functions effectively. To sum up, the main two objectives of the FIU are counter-terrorism and anti-money laundering.

What is goAML?

Thus, goAML is a software, designed as a solution against terrorism financing, money laundering, and other misuses of financial means, developed specifically for FIU. It is important to note that GoAML is governed by the Ministry of Economy (MOE) of the UAE which, in turn, reserves the right to conduct enhanced audits of the entities. This falls under the scope of applicability of this regulation. Such audits may include:

• AML/CFT Policies and Procedures
• Internal risk assessments
• Periodical AML/CFT reports
• Red flags policies on suspicious transactions
• PEP identification protocols

The software was first developed by the United Nations Office on Drugs and Crime (UNODC), which is now centralized and counts around 50 Financial Intelligence Units globally.

goAML in the UAE

The legislation, which regulates AML and CFT, and Financing of Organized Crimes, is Federal Decree-Law № 20 of 2018. Therefore, the implementation of goAML in the UAE must comply with the Decree. The Ministry of Economy has prepared a plan to implement goAML, designed to regulate the Designated Non-Financial Businesses and Professions (DNFBP).

Businesses, operating in the UAE, must register with the goAML system and comply with its requirements. As an internationally recognized anti-money laundering portal, the goAML system would report any kind of suspicious transactions and reports (STR).

Who must be registered with the system?

• The businesses, which fall under the category of DNFBP:
• Financial entities, regulated by the Central Bank (DFSA, SCA, ADGM)
• Real Estate Brokers and Agents
• Lawyers and Notaries (the activities include managing funds of a customer, assistance in buying a property in the UAE, managing savings or securities account)
• Independent advocates
• Independent accountants
• Precious metals and stones dealers
• Corporate Services and Trusts Providers (the activities include establishing legal entities, setting up nominal shareholding structures, providing trustee services, providing secretarial services, providing nominee directors or partners for legal entities)

Subjects of DNFBP may be amended or added by the Ministry of Economy of the UAE.

Penalties

Now, let’s overview the penalties that may arise from failure to comply with the regulations:

In the context of Anti Money Laundry regulations, failure to register with the system might lead to fines starting from AED 50,000 to AED 5 million, and/or imprisonment for up to 10 years. The combination of fines between AED 300,000 and AED 10 mln. and imprisonment may be ruled to those who committed a crime through non-profit or unlawful organizations or committed a repeated offense. There is no minimum threshold for the amount of money subject to the offense.

In the context of Combating Financing Terrorism, the penalty may be imprisonment from 10 years up to a life sentence. Fines start from AED 300,000 to AED 10 mln, AED. For legal entities fines may be ranging between AED 500,000 and AED 50 mln. with consequent termination of the entity.

Failure to report suspicious transactions may lead to fines starting from AED 100,000 to AED 1 mln. and, in some cases, may lead to imprisonment. Incorrect reporting of information is also subject to fines.

The Central Bank of the UAE may freeze the suspicious transaction for 7 working days, while the public prosecutor has the power to extend the check-up process to the required amount of time as deemed necessary.

If you would like advice, or assistance with goAML registration of your business, please contact us. 

Marsel Shadmanov

Head of Corporate Services at Garant Business Consultancy DMCC

Phone +971 4 421 4335

Email info@garant.ae