Entire Section

  • AML 10 AML 10 Sanctions and Other International Obligations

    • AML 10.1 AML 10.1 [Deleted]

      • AML 10.1.1 [Deleted]

        [deleted]

        Deleted by DFSA RM196/2016 (Made 7th December 2016). [VER13/02-17]

    • AML 10.2 AML 10.2 Relevant United Nations resolutions and sanctions

      • AML 10.2.1 AML 10.2.1

        (1) A Relevant Person must establish and maintain effective systems and controls to ensure that on an ongoing basis it is properly informed as to, and takes reasonable measures to comply with, relevant resolutions or sanctions issued by the United Nations Security Council.
        (2) A Relevant Person must immediately notify the DFSA when it becomes aware that it is:
        (a) carrying on or about to carry on an activity;
        (b) holding or about to hold money or other assets; or
        (c) undertaking or about to undertake any other business whether or not arising from or in connection with (a) or (b);
        for or on behalf of a person, where such carrying on, holding or undertaking constitutes or may constitute a contravention of a relevant sanction or resolution issued by the United Nations Security Council.
        (3) A Relevant Person must ensure that the notification stipulated in (2) above includes the following information:
        (a) a description of the relevant activity in (2) (a), (b) or (c); and
        (b) the action proposed to be taken or that has been taken by the Relevant Person with regard to the matters specified in the notification.
        Derived from RM117/2013 [VER9/07-13]
        [Amended] DFSA RM196/2016 (Made 7th December 2016). [VER13/02-17]

        • AML 10.2.1 Guidance

          1. In AML Rule 10.2.1(1), taking reasonable measures to comply with a United Nations Security Council resolution or sanction may include, for example, a Relevant Person not undertaking a transaction for or on behalf of a person or undertaking further due diligence in respect of a person.
          2. Relevant United Nations Security Council resolutions or sanctions mentioned in AML Rule 10.2.1 may, among other things, relate to money laundering, terrorist financing or the financing of weapons of mass destruction or otherwise be relevant to the activities carried on by the Relevant Person. For example:
          a. a Relevant Person should exercise due care to ensure that it does not provide services to, or otherwise conduct business with, a person engaged in money laundering, terrorist financing or the financing of weapons of mass destruction; and
          b. an Authorised Market Institution should exercise due care to ensure that it does not facilitate fund raising activities or listings by persons engaged in money laundering or terrorist financing or financing of weapons of mass destruction.
          3. A Relevant Person should be proactive in checking for, and taking measures to comply with, relevant resolutions or sanctions issued by the United Nations Security Council. The DFSA expects Relevant Persons to perform checks on an ongoing basis against their customer databases and records for any names appearing in resolutions or sanctions issued by the United Nations Security Council as well as to monitor transactions accordingly.
          4. A Relevant Person may use a database maintained elsewhere for an up-to-date list of resolutions and sanctions, or to perform checks of customers or transactions against that list. For example, it may wish to use a database maintained by its head office or a Group member. However, the Relevant Person retains responsibility for ensuring that its systems and controls are effective to ensure compliance with this module.
          5. Relevant Persons should also be aware of their obligations under Cabinet Decision No. 20 of 2019, which include the obligation to check on a daily basis the sanctions lists issued by the United Nations Security Council.
          Derived from RM117/2013 [VER9/07-13]
          [Amended] DFSA RM196/2016 (Made 7th December 2016). [VER13/02-17]
          [Amended] DFSA RM231/2018 (Made 6th June 2018) [VER15/07-18]
          [Amended] DFSA RM258/2019 (Made 26th June 2019). [VER16/07-19]

    • AML 10.3 AML 10.3 Government, Regulatory and International Findings

      • AML 10.3.1 AML 10.3.1

        (1) A Relevant Person must establish and maintain systems and controls to ensure that on an ongoing basis it is properly informed as to, and takes reasonable measures to comply with, any findings, recommendations, guidance, directives, resolutions, sanctions, notices or other conclusions (each of which is referred to in this Rule as a "finding") issued by:
        (a) the government of the U.A.E. or any government departments in the U.A.E.;
        (b) the Central Bank of the U.A.E. or the FIU;
        (c) FATF;
        (d) U.A.E. enforcement agencies; and
        (e) the DFSA,
        concerning the matters in (2).
        (2) For the purposes of (1), the relevant matters are:
        (a) arrangements for preventing money laundering, terrorist financing or the financing of weapons of mass destruction in a particular country or jurisdiction, including any assessment of material deficiency against relevant countries in adopting international standards; and
        (b) the names of persons, groups, organisations or entities or any other body where suspicion of money laundering or terrorist financing or the financing of weapons of mass destruction exists.
        (3) For the purposes of (1), measures in a finding that a Relevant Person must comply with include, but are not limited to, measures:
        (a) requiring specific elements of enhanced due diligence;
        (b) requiring enhanced reporting mechanisms or systematic reporting of financial transactions;
        (c) limiting business relationships or financial transactions with specified persons or persons in a specified jurisdiction;
        (d) prohibiting Relevant Persons from relying on third parties located in a specified jurisdiction to conduct customer due diligence;
        (e) requiring correspondent relationships with banks in a specified jurisdiction to be reviewed, amended or, if necessary, terminated;
        (f) prohibiting the execution of specified electronic fund transfers; or
        (g) requiring increased external audit requirements for financial groups with respect to branches and subsidiaries located in a specified jurisdiction.
        (4) A Relevant Person must immediately notify the DFSA in writing if it becomes aware of non-compliance by a person with a finding and provide the DFSA with sufficient details of the person concerned and the nature of the non-compliance.
        Derived from RM117/2013 [VER9/07-13]
        [Amended] DFSA RM196/2016 (Made 7th December 2016). [VER13/02-17]
        [Amended] DFSA RM223/2018 (Made 18th April 2018). [VER14/07-18]
        [Amended] DFSA RM231/2018 (Made 6th June 2018) [VER15/07-18]
        [Amended] DFSA RM258/2019 (Made 26th June 2019). [VER16/07-19]

        • AML 10.3.1 Guidance

          1. The purpose of this Rule is to ensure that a Relevant Person takes into consideration the broad range of tools used by competent authorities and international organisations to communicate AML/CTF risks to stakeholders.
          2. The Rule also permits the DFSA to require enhanced due diligence or other specific countermeasures to address risks identified in a specific country or jurisdiction. The DFSA may impose such countermeasures either when called upon to do so by FATF or independently of any FATF request.
          3. Relevant Persons considering transactions or business relationships with persons located in countries or jurisdictions that have been identified as deficient, or against which the U.A.E. or the DFSA have outstanding advisories, should be aware of the background against which the assessments, or the specific recommendations have been made. These circumstances should be taken into account in respect of introduced business from such jurisdictions, and when receiving inward payments for existing customers or in respect of inter-bank transactions.
          4. The Relevant Person's MLRO is not obliged to report all transactions from these countries or jurisdictions to the FIU if they do not qualify as suspicious under the Federal AML legislation. See AML chapter 13 on Suspicious Activity Reports.
          5. Transactions with counterparties located in countries or jurisdictions which are no longer identified as deficient or have been relieved from special scrutiny (for example, taken off sources mentioned in this Guidance) may nevertheless require attention which is higher than normal.
          6. In order to assist Relevant Persons, the DFSA will, from time to time, publish U.A.E., FATF or other findings, guidance, directives or sanctions. However, the DFSA expects a Relevant Person to take its own steps in acquiring relevant information from various available sources. For example, a Relevant Person may obtain relevant information from the consolidated list of financial sanctions in the U.A.E Cabinet, European Union Office, HM Treasury (United Kingdom) lists, and the Office of Foreign Assets Control (OFAC) of the United States Department of Treasury.
          7. In addition, the systems and controls mentioned in AML Rule 10.3.1 should be established and maintained by a Relevant Person taking into account its risk assessment under chapters 5 and 6. In AML Rule 10.3.1, taking reasonable measures to comply with a finding may mean that a Relevant Person cannot undertake a transaction for or on behalf of a person or that it may need to undertake further due diligence in respect of such a person.
          8. A Relevant Person should be proactive in obtaining and appropriately using available national and international information, for example, suspect lists or databases from credible public or private sources with regard to money laundering, including obtaining relevant information from sources mentioned in Guidance 6 above. The DFSA encourages Relevant Persons to perform checks against their customer databases and records for any names appearing on such lists and databases as well as to monitor transactions accordingly. As set out in the Guidance after Rule 10.2.1, a Relevant Person may use a database maintained elsewhere for an up-todate list of sanctions or to conduct checks of customers or transactions against the list. However, it retains responsibility for ensuring the effectiveness of its systems and controls.
          9. The risk of terrorists entering the financial system can be reduced if Relevant Persons apply effective AML strategies, particularly in respect of CDD. Relevant Persons should assess which countries carry the highest risks and should conduct an analysis of transactions from countries or jurisdictions known to be a source of terrorist financing.
          10. The DFSA may require Relevant Persons to take any special measures it may prescribe with respect to certain types of transactions or accounts where the DFSA reasonably believes that any of the above may pose a money laundering risk to the DIFC.
          Derived from RM117/2013 [VER9/07-13]
          [Amended] DFSA RM196/2016 (Made 7th December 2016). [VER13/02-17]
          [Amended] DFSA RM223/2018 (Made 18th April 2018). [VER14/07-18]
          [Amended] DFSA RM231/2018 (Made 6th June 2018) [VER15/07-18]
          [Amended] DFSA RM258/2019 (Made 26th June 2019). [VER16/07-19]