AML Compliance Officer: Role and Responsibilities

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AML Compliance Officer: Role and Responsibilities

As per the UAE Anti-Money Laundering (AML) Law, Financial Institutions and Designated Non-Financial Business Professionals (DNFBPs) must appoint an AML Compliance Officer. The role of such an employee is to comply with the anti-money laundering laws- Federal Decree-law No. (20) of 2018 On Anti Money Laundering and combating the financing of terrorism. Another law is Article (11) Cabinet Decision No. (58) of 2020 Regulating the Beneficiary Owner Procedure. 

The legal person or entity appoints the AML compliance officer role. They are natural persons appointed and should have the requisite experience and skills to implement a robust AML compliance process. The AML compliance officer carries on the duties on behalf of the legal person or entity who provides all the required data to the legal person or entity, follows the procedures as per the AML laws, and helps prevent money laundering activities. The AML officer should carry on the duties with utmost competence to help businesses comply with the AML laws.

Responsibilities of an AML Compliance Officer under the UAE AML Laws

Section 8, Article 21, states the responsibilities of a Compliance Officer.

  • Detect transactions in Financial Crimes
  • The Compliance officer needs to review and evaluate data of suspicious accounts that might be concealing money laundering. The Officers can report the data to the Financial Intelligence Unit depending on the case. The transaction might be continued, and they need to state the reasons for their research. They need to collaborate with the supervisory authority and FIU to provide all the relevant data. 
  • The AML compliance officer reviews the internal rules and processes to prevent financial crimes. He also needs to update the relevant authorities and comply with the latest rules and regulations.
  • The AML compliance officer has to submit the reports on the rules to the concerned authority. 
  • To conduct AML training for the employees and make them aware of the AML rules and regulations and train them on the best industry practices. Training is imparted to employees to understand money laundering methods and implement the right processes to prevent money laundering and financial terrorism.

The compliance officer’s duties can be categorised into two parts- Duties to the employer and responsibilities to the Government. 

AML Compliance Officer's duty to the Government

The compliance officer will ensure that the legal entity complies with the Government’s AML rules and regulations under different laws. They need to report the suspicious accounts to the FIU- Financial Intelligence Unit.

AML Compliance Officer's duty to the Employer

AML Compliance Officer’s duty to the employer under the UAE AML Law includes various functions. The compliance officer can make a correct evaluation of the risk assessment. A company might be exposed to risk due to the nature of business and use proper measures to create a robust AML compliance program. 

  • The AML compliance officer will create the right internal policies and rules that businesses should follow to make a strict compliance program to avoid penalties. 
  • The AML compliance officer will evaluate and review the existing internal rules and regulations and ensure that the business implements the policies successfully. The officer will research the AML laws that the company needs to follow and update the AML compliance program to make the business AML compliant. 
  • The AML compliance officer will enforce due diligence programs to identify the suspicious account holders and transactions and report them to the relevant authority. In this way, they’ll be able to prevent any money laundering activity and make an educated decision regarding association with only legitimate entities. 
  • The AML Compliance Officer will report any suspicious transactions immediately if it’s found that there’s a reasonable ground to believe that the transactions are related to crime. The officer will create STR- Suspicious Transaction Reports and submit them to the Financial Intelligence Unit. 
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Why should businesses hire a Compliance Officer?

The AML compliance officer has to perform duties for both the employees and the Government. The officers work in tandem with the management and staff to identify and manage the regulatory risk. They need to ensure that the organisation complies with the Government’s rules and regulations, internal policies, and bylaws. 

A compliance officer needs to ensure that the business has an effective AML compliance program in place. Every business is unique, and the AML program should be robust to identify the weak areas in which the company needs a strict compliance program.

The compliance officer should be well versed with the regulatory issues and AML laws that pertain to the type of business, identify any risk of non-compliance, and use advanced solutions to eliminate the risks and help businesses stay compliant with the AML rules and regulations. Companies can outsource the AML compliance services to a reliable service provider.

Companies can get the AML/ CFT Policy, controls, and procedures documentation and get an elaborate in-house AML compliance department set up, services including appointing an AML compliance officer. The service provider will help appoint a compliance officer who will undertake all the responsibilities for the AML/ CFT compliance for the business. The officer will ensure that the compliance department works seamlessly, and if necessary, a compliance team might be created to streamline the AML compliance function.

It would be best if businesses invested in the best AML software to automate the AML compliance process and help comply with all the AML rules and regulations. The software will aid the compliance team and the compliance offer to ensure the smooth functioning of the AML compliance department. 

Conclusion

The AML Compliance officers play an instrumental role in helping businesses avoid regulatory risks and help the company to be compliant with the AML laws. So, companies should appoint and rely on the compliance officer to eliminate the risk of non-compliance. The Money Laundering Reporting Officer (MLRO) needs to be aware of all the latest legislation to provide correct guidance, and businesses do not have to face non-compliance issues. 

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FAQs

An AML Compliance Officer is a person responsible for compliance of the company with national and international AML regulations. They detect suspicious transactions, conduct risk assessments, monitor the company’s activities, submit relevant reports to concerned authorities, and conduct AML training for employees.  

About the Author

Pathik Shah

CISA, FCA, CS, DISA (ICAI), FAFP (ICAI)

Pathik is a multi-disciplinary professional with more than 22 years of experience in compliance, risk management, accounting, system audits, IT consultancy, and digital marketing. He has extensive knowledge of Anti-Money Laundering rules and regulations, and he helps companies comply with legal requirements. Pathik also helps companies generate value from their IT investments.