Strengthening AML Oversight: UAE’s New Federal Decree and Its Implications

A recent Federal Decree has introduced key amendments to the UAE's Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Law, marking a significant step in the country’s ongoing efforts to enhance its AML framework. These changes come on the heels of the UAE’s removal from the Financial Action Task Force (FATF) Grey List, reflecting the nation’s commitment to maintaining robust AML controls.

Understanding the Amendments

Contrary to some market interpretations, the new amendments do not establish entirely new oversight bodies for AML/CFT. Instead, they reorganize existing structures to align with the UAE’s broader governance framework. The National Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organizations Committee (National Committee), originally formed by a decision of the Minister of Finance, will now be formally constituted by the Cabinet. The Higher Committee, initially a temporary body created to oversee the UAE’s FATF Mutual Evaluation, will become a permanent entity known as the Supreme Committee, falling under the Presidential Court's authority.

These changes reflect the UAE’s intent to elevate AML governance to the highest levels of government. The introduction of a General Secretariat to the National Committee is particularly noteworthy, as it promises to enhance the Committee’s operational capabilities by providing dedicated resources, thereby improving the overall effectiveness of AML oversight.

Implications for Businesses

While the amendments do not directly alter compliance requirements for regulated entities, they signal a shift towards a more rigorous enforcement environment. The UAE’s elevation of AML oversight bodies highlights the government’s prioritization of AML initiatives, suggesting that businesses should prepare for increased scrutiny.

Recent actions by UAE authorities reinforce this trend. The Central Bank imposed a $1.6 million fine on a local bank for AML/CFT violations, the Ministry of Economy revoked licenses of 32 precious metals dealers for AML failings, and the Cabinet amended penalties for Designated Non-Financial Businesses and Professions (DNFBPs) with compliance issues. These measures underscore the UAE’s determination to maintain a stringent enforcement regime.

Looking Ahead

Businesses should anticipate that the UAE’s focus on AML enforcement will continue to intensify, particularly as the country prepares for its next FATF Mutual Evaluation between 2025 and 2027. Authorities are likely to emphasize areas such as virtual asset regulation, asset recovery, information sharing, and the development of national databases to strengthen the national risk assessment.

While the recent amendments do not impose new compliance obligations, they serve as a clear indication that the UAE is committed to refining its AML framework in line with FATF standards. Companies operating in the UAE should remain vigilant and ensure their AML practices are robust, as further regulatory adjustments and enforcement actions are expected in the near future.

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