AML Consultant in Dubai: Comprehensive Guide to Compliance and Responsibilities

Did you know that before 2024, the UAE was on the FATF “grey list“?

But Not anymore! The UAE has turned the tide with remarkable reforms in its fight against money laundering and terrorist financing.

So, what changed? A lot, actually.

From achieving full compliance with 15 and largely compliant with 24 FATF recommendations to strengthening due diligence in high-risk sectors, the UAE’s progress has been nothing short of transformative.

What more? in February 2024, this commitment paid off when the FATF officially removed the UAE from its increased monitoring list. It’s a testament to how serious the nation is about aligning with global standards.

But what does that mean for financial and designated non-financial businesses operating within the UAE? Can they relax?

Certainly not- the pressure on the UAE to follow AML compliance is now more than ever. A FATF 2023 report commended the UAE’s increased investigations into complex money laundering cases and its proactive approach to seizing illicit assets.

For example, the country has strengthened public-private collaboration and enhanced due diligence requirements across high-risk sectors like real estate and precious metals trading. But a lot needs to be done still.

So how do you safeguard your interest while also profiting- you get in touch with AML compliance consultants: people who can help you navigate through this tough maze of regulatory frameworks.

Who is a UAE Compliance Officer?

Under Section 8, Article 21 of the Cabinet Decision No 10, financial institutions and Designated non-financial institutions need to appoint a compliance officer. Such an officer needs to be competent and have proper experience.

Here is what they are required to do.

• Detection of transactions that are associated with crimes.
• Review and study data to see whether transactions need to be sent to FIU or not.
• Review of internal procedures and rules for AML compliance.
• Conduct or supervise training of employees for compliance purposes.
• Collaborate with the supervisory authority or FIU and give them any data related to any records or transactions.

UAE Law on AML Consultants and Compliance Officers

Conducting transparent and impartial activities to detect and report any suspicious activities- that is the role of AML consultants and compliance officers. But who enforces this and for types of businesses?

The federal decree-Law no 20 of 2018, along with the Cabinet Decision No. (58) of 2020 enforces the role of AML compliance officers. Here are all the businesses that need to comply with AML.

The Problem with AML Consultant- Why do Businesses Hesitate?

Dubai being a financial hub of the modern world, businesses look at Dubai when they want to expand or achieve global dominance. Given the fact Dubai attracts many high-networth individuals, the opportunities to launder money are huge too. This brings many compliance challenges. Given the fact- are there enough AML consultants in Dubai?

AML consultants are a necessity in Dubai because they help prevent the de-risking of actual clients. Before we jump onto why AML consultants are important for financial and non-financial institutions operating within the UAE, it is important to know why many AML consultants in Dubai lag behind.

1. Nuance Involved in Risk Categorization by AML Tools

AML Compliance tools, such as the ones used for AML/CFT, may have many shortcomings and deficiencies and may not adequately show the exact level of risk associated with a PEP. For example, a PEP may be considered high risk in one jurisdiction and low risk in another- so what’s the conclusion here?

AML regulations are often complicated and conflicting, and AML tools may not be able to show the detailed context of a particular case, so how do businesses know how to deal with such a nuance? Here is where anti-money laundering consultants come in. They will be able to assess whether the PEP they have identified is in line with the jurisdiction-specific regulation.

2. Assessing Risk on the Basis of Jurisidiction’s Relevancy

Imagine organization X being flagged as ‘high-risk’ by a tool- but it is not a universally banned organization. But how would you know?

An organization banned in another country may be perfectly legitimate in your jurisdiction. Without this knowledge and expertise, your business might reject a perfectly valid client based on inaccurate risk profiling.

3. Sanctioned Lists Issues

When a name appears on a sanctioned list- do you automatically sideline it? Most probably, yes- that is what most businesses do. But this is certainly not the best approach.

When a name appears on a sanctions list, it doesn’t automatically mean high risk for every business or jurisdiction. For instance, an entity sanctioned for specific trade restrictions in one region may pose no significant threat in another.

Many tools lack the context to differentiate this. An AML consultant will be able to assess whether the sanctioned name falls within or outside the risk appetite of the organization. Additionally, they will be able to:

• analyze the sanctions regime
• evaluate relevance to your jurisdiction
• ensures decisions are precise and compliant

This helps avoid unnecessary disruptions.

UAE AML Law and the Role of an AML Consultant in Dubai

If you run a business and are unsure of whether to hire an AML consultant, read this section. It describes the role of an AML consultant in Dubai in detail.

1. Assess Overall Risk Associated with a Business

An AML officer within a financial or designated financial institution, under Section 2, Article 4, is supposed to consider diverse risk factors associated with countries, geographic locations, products, services, and customers and conclude the level of overall risk and mitigation techniques.

2. Develop Internal Policies (Depending On the Size and Nature of the Business)

An AML consultant in Dubai is required to not only develop internal policies, procedures, and controls but also monitor the implementation of these policies.

3. Apply Customer Due Diligence Measures

An Aml compliance officer in UAE has to conduct customer due diligence by obtaining more information regarding Ultimate Beneficial Owners and Beneficial owner identities. They are also supposed to investigate this information to assess the reasons for each hefty transaction. Moreover, under Section 3, Article 5, they are given permission to simplify Customer Due Diligence measures should a client or customer appear low-risk after a thorough evaluation.

The best AML consultant in UAE will know when to apply CDD measures and when to file a plain suspicious transaction report. For example, Article 13 of the same section states that within the UAE, when financial or DNFBP should not apply CDD if they fear that doing so would tip off the customer.

4. PEP Screening

A good AML consultant in Dubai will apply proper PEP screening. First, they will identify whether a beneficial owner is a PEP and, if yes, identify the source of their funds to ensure AML compliance. For domestic PEPs, they will need to conduct CDD.

5. Family Takaful Insurance

Family takaful insurance in the UAE presents a unique compliance challenge due to its alignment with Islamic principles and its growing adoption. Unlike conventional life insurance, family takaful operates on a mutual cooperation model, requiring specific regulations according to Section 4, Article 15, to ensure Sharia compliance alongside AML measures. AML consultants in Dubai help strike a balance between regulatory adherence and the trust of clients seeking shariah-compliant services.

6. Requirements Relating to New Technologies

It is the job of an AML consultant in Dubai to preemptively assess any risk associated with the products or services that are yet to be launched in the market. Similarly, under section 10, article 23, they are supposed to take any measures that are needed to mitigate the risks associated with these.

Multiple Roles and Compliance Challenges for Startups

Imagine a small jewelry business expanding its client base across borders.

The compliance officer, also doubling as a sales manager, finds themselves in a delicate situation.

A high-value transaction from a politically exposed person raises red flags, But rejecting it might affect sales targets.
So, how does an AML consultant separate their roles? It is often practically impossible.

As businesses, you need to ensure

• The AML consultant is not responsible for sales or revenue on a day-to-day basis, thus preventing any conflict of roles.
• Retain any records for procedural exceptions

In instances where it is not possible for AML consultants in Dubai to separate duties, it is important to carry out the following:

• Aml audits independently
• Increase audit frequency
• Review of enhanced transaction

Conclusion

Dubai’s dynamic economy has positioned the UAE as a rapidly growing global hub for trade and investment. However, this growth also attracts sophisticated financial crimes, including money laundering, which can complicate business operations and compliance.
Navigating these challenges requires expertise, making a consultant indispensable. With their deep understanding of local regulations, industry trends, and risk mitigation strategies, consultants empower businesses to operate securely and efficiently.
By ensuring adherence to legal frameworks and offering guidance, a consultant can help you comply with AML regulations while you focus on expanding your business.