What are the responsibilities of the FIU- Financial Intelligence Unit under the UAE Anti-Money Laundering Law?

Responsibilities of the FIU

What are the responsibilities of the FIU- Financial Intelligence Unit under the UAE Anti-Money Laundering Law?

The UAE government has made many efforts to combat money laundering and financing of terrorism. The government has created a legislative and regulatory AML/ CFT environment in which institutional framework plays a vital role in preventing the money laundering and financing of terrorism. The AML/ CFT laws help protect the economy from misuse and identify and deter criminals from laundering illicit money into the legal system and prevent them from using it for criminal and terrorist funding. The UAEs legal and statutory framework includes a vital organisation the FIU- the Financial Intelligence Unit. The organisation has been developed to ensure that entities follow the correct AML compliance procedure and sync with the AML UAE laws. 

When and how did the FIU come into existence under the UAE Anti Money Laundering Law?

The Central Bank of UAE (CBUAE) established a specific unit in 1998 dedicated to investigating financial crimes, frauds, and suspicious transactions. It acted as a unique institution that prevented money laundering and terrorist financing activities. Then in 2002, this organisation was renamed Anti-Money Laundering and Suspicious Cases Unit (AMLSCU). After the UAE government introduced the Federal Decree-Law No. 20 of 2018 on AML/CFT, the unit was renamed the Financial Intelligence Unit. Since then, the organisation has been known as the FIU.  

As per the UAE Anti-Money Laundering Law, the Financial Intelligence Unit is headquartered in the State’s capital. FIUs operate independently and perform their duties as per the AML law. As per the rules, they can open branches within Central Bank branches in the Emirates of the State. The CBUAE will provide technical assistance, workforce, and human resources so that the FIU functions appropriately and fulfils the requirements as required by the UAE’s anti-money laundering law.  

Functions of Financial Intelligence Unit under the UAE AML/CFT Regulations:

The FIU was created to strengthen the UAE Government‘s anti-money laundering regulation. It acts as the central institution which receives the STRs and the related information on the fraudulent accounts and transactions.  

Powers of the FIU under the UAE AML Laws are discussed below: 

  1. It can establish Financial Unit Departments and internal regulations on procedures for approval by the Central Bank’s Board of Directors.   
  2. Create a database that can store any information and secure it by establishing the rules to ensure the security of the data. 
  3. Provide training on AML and train the employees. Provide training material to provide the updated knowledge and skills to help perform duties to be AML compliant. It also includes providing training to other authorities inside or outside the State. 
  4. To research domestic and international crimes and follow up to arrive at conclusions.  
  5. Prepare reports on how it has prevented crimes and provide analysis on STRs- Suspicious Transaction Reports
What are the responsibilities of the FIU- Financial and Intelligence Unit under the UAE Anti-Money Laundering Law

The functions of the FIU in the Suspicious Transaction Report under the UAE Anti-Money Laundering Law are mentioned below:  

  1. The FIU receives Suspicious Transaction Reports on financial crimes on approved templates from entities.  
  2. The unit analyses the STRs and creates a database.  
  3. It might ask the entities to submit any additional information that might be considered necessary to carry out their duties for STRs.  
  4. It provides results on the information obtained in the reports to improve the measures employed for combatting money laundering and financial terrorism. For this, it cooperates with supervisory authorities by sharing the analysis results. It helps to measure the quality of the reports submitted and ensure that the entities comply with the AML rules and regulations efficiently.  
  5. The FIU shares the data with the Law Enforcement Authorities when there seems to be a high probability that a financial crime has been committed.  
  6. Share information obtained from foreign financial authorities to the It judicial authority as required.  
  7. The FIU analyses the STRs and evaluates money laundering and terrorism financing activities. 

Working of the Financial Intelligence Unit under the UAE AML

The Financial Intelligence Unit under the UAE Anti-Money Laundering Law analyses available reports and information from the entity in two ways as follows:

The FIU, under the Anti-Money Laundering law, has to study the available reports from the entity in two ways. It adopts the operational analysis method- using the available information to detect fraudulent transactions, persons, and criminal activities. The second method is strategic analysis. The FIU uses the information that includes the data provided by the concerned authorities to detect fraudulent transactions and identify criminal activities.  

It is noteworthy that the FIU uses the goAML portal to receive, analyse and forward the STRs efficiently; the data is enormous, so using an integrated system such as the goAML portal speeds up the process. The UNODC- United Nations Office on Drugs and Crime has developed the goAML system to prevent money laundering and financial terrorism.  

Duties of the FIU under the UAE International Legislative Framework

The FIU must perform its duties on the international level by exchanging information. It has to report the results obtained on Suspicious Transaction reports with its fellow AML compliance unit in other countries.  

Conclusion

Financial institutions need to follow the AML/ CFT laws. The Financial Intelligence Unit plays a significant role in ensuring compliance with various functions, such as collaboration with local, regional, and international stakeholders. The FIU works in tandem with them and ensures that they collectively achieve the goal of preventing money laundering and the funding of various crimes and terrorist activities with illicit funds. If you need assistance with AML compliance and ensure that your business is AML compliant with the UAE’s AML/ CFT rules and regulations, you might consider AML consultants.  

AML UAE has a dedicated team of professionals, including compliance experts, policymakers, economists, data scientists, and many more professionals whose knowledge and experience will assist you in becoming AML compliant. Get the services of the top AML consultants in the UAE and follow the UAE AML Laws and regulations without fail. 

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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.