AML Periodic inspection: What to expect when authorities come for a Periodic AML Inspection

AML Periodic inspection: What to expect when authorities come for a Periodic AML inspection

TFS Private Sector Mini Guide

The team representing the Ministry of Economy UAE has started visiting companies to conduct periodic AML inspections regarding the implementation of AML/CFT procedures. As a part of their AML periodic inspection, the team checks whether the company has implemented suitable procedures for anti-money laundering and combating terrorism financing.  

The Ministry’s notification directs the companies to cooperate with the inspection team during the visit. This notification is in regards to the Federal Decree No. 20 of 2018 and Cabinet Decision No. 10 of 2019 for the implementation of Federal Decree law No. (20) of 2018 on anti-money laundering. The financial institutions and DNFBPs are required to fill in the checklist with accurate details and submit a signed copy to the inspection team during their visit. 

DNFBPS must fill in the following information in different sections as asked in the checklist: 

Company details 

  • Legal name 
  • DNFBP category 
  • Licensing Authority, Number, and Date 
  • Address 
  • Inspection Date 
  • The name and signature of the authorized signatory, which can be a Compliance Officer or Manager 
  • Ownership structure including details on ultimate beneficial owner (UBO) 
  • Description of the products and services you offer and types of customers 

General policies and procedures 

In this section, you have to mention whether you have prepared and documented AML/CFT policies and procedures. If you have those, you have to share your AML Policy via email. The Ministry also intends to know whether you have circulated these procedures and policies to all your employees.  

Download Free AML Policy Template for Jewellers 

Download Free AML Policy Template for Trust and Company Service Providers (TCSP) 

Download Free AML Policy Template for Lawyers, Notaries, and other Legal Professionals in UAE 

Download Free AML Policy Template for Real Estate Agents and Brokers in UAE 

Internal risk assessment 

In this section, the Ministry requires you to mention whether you carry out and document an internal risk assessment to identify the money laundering risks to your business. In the document, you need to provide details on the risk categories included in the risk assessment, such as: 

  • Country risk 
  • Customer risk – Check our infographic on customer risk assessment 
  • Delivery channels risk 
  • Products, services, and transaction risk 
  • Results of the National Risk Assessment of the UAE’s money laundering and terrorist financing risks 

Check our blog: The risk-based approach in anti-money laundering compliance  

Governance 

In this section, the Ministry intends to know whether the Board of Directors and/or senior management demonstrate overall responsibility and awareness of AML/CFT matters within the entity. The companies must also mention whether the Board and/or senior management receive regular AML/CFT reports from the Compliance Officer.  

Check out our guide on establishing an effective AML/CFT Framework in your business.  

Compliance Officer 

This section requires information on the Compliance Officer. The first point you have to mention is whether you have appointed a compliance officer. If the answer to it is yes, the Ministry requires the name and email address of the Officer.  

The Ministry also intends to know whether the company has provided all the relevant details and documents to the Compliance Officer, including financials. Also, you must talk about the reporting manager of the Compliance Officer.  

Check out our article on the roles and responsibilities of AML Compliance Officer 

Customer acceptance and onboarding 

This section requires companies to talk about their customer onboarding process and policies. The Ministry intends to know whether you have: 

Cash transactions 

In this section, the Ministry wants to know whether you allow cash transactions in your business. You must mention the details of specific controls and procedures implemented in your company for cash transactions.  

The Ministry intends to know from you details on: 

  • Percentage of cash transactions of the company’s total transactions 
  • Cases of cash transactions of more than AED55,000.0 during the last 24 months 
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Suspicious transaction reporting

In this section, the company must answer the following: 

Check out our goAML Web Submission Guide 

Record keeping 

The Ministry intends to know if you keep all records, documents, materials, and data of all local or international financial, commercial, and cash transactions for a period of no less than five years from the date of completing the process or the end of the relationship with the customer. Check out our infographic on AML Compliance Requirements in UAE 

Training and awareness 

You must provide information on the regular and appropriate training programmes you conduct for your employees in line with the nature and degree of risks of its activities to train employees on AML/CFT procedures. You must describe the training and its format in detail. Check our article emphasising the importance of AML training. 

Targeted financial sanctions 

This section allows the Ministry to know if your customers are subject to targeted financial sanctions by the UAE government, the UN Security Council, or any other relevant body. You must also inform any screening tool that you use to check the same in this form.  

You must mention if you have ever identified exposure to targeted financial sanctions designated persons. If yes, what were the actions the company took, including but not limited to asset freezing, reporting to the competent authority, etc.  

Check Targeted Financial Sanctions Implementation Guide

Financial activity 

In this section of the checklist, you must list all your bank accounts and related details such as name, location, IBAN, etc. The Ministry wants to know if you faced any issues with any banking institution, along with the relevant details.  

Conclusion 

All these details will help the inspecting team know about the procedures in place on your premises related to AML/CFT. This proves your commitment to abiding by the AML law and dedication to reducing money laundering activities.  

About AML UAE 

AML UAE will help you fill out the form and comply with AML regulations in UAE. AML UAE is a leading provider of AML consultancy services to companies in the UAE to aid in AML compliance. We can help you with: 

Our timely and accurate AML consulting services

For your smooth journey towards your goals

Our recent blogs

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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.