The UAE has made several advancements in the anti-money laundering and counter-financing of terrorism (AML/CFT) system in the country. Recently, the Ministry of Economy conducted a briefing on the advancements in Cabinet Decision No. 109 of 2023 concerning real beneficiary procedures and the subsequent Cabinet Decision on administrative sanctions. These developments aim to bolster the UAE’s economic competitiveness on regional and global scales.
HE Abdullah Ahmed Al Saleh, Undersecretary of the Ministry of Economy, emphasised the significance of real beneficiary procedures within the AML/CFT system. He highlighted that the recent resolutions mark a pivotal step in supporting the nation’s efforts to combat suspicious financial activities. The alterations aim to enhance the regulatory and legislative framework, fostering governance in the national business environment and aligning with global Financial Action Task Force (FATF) standards.
The amendments entail new measures for registration authorities to oversee the real beneficiary procedures concerning licensing, registration, and partner or shareholder registry processes. The objective is to ensure utmost compliance and elevate the UAE’s economic standing. These changes also involve implementing efficient operational and regulatory measures aligning with international transparency standards, fostering a secure and transparent economic atmosphere and bolstering the UAE’s global economic competitiveness.
“The adoption of these two new resolutions constitutes an important addition to the previous AML legislation promulgated by the country, in particular the regulation of the real beneficiary procedures,” said HE Al Saleh. “It includes new updates to improve the collection, assessment, and registration of real beneficiary data of all private sector enterprises within the country, including those in commercial free zones, in cooperation with relevant local licensing entities.”
“This is to ensure that the real beneficiary data of all relevant private enterprises are collected and recorded, as there are nearly 700,000 enterprises operating in various sectors in the UAE,” he added.
Involving all registrars
The Ministry stressed that these modifications reinforce the regulation of real beneficiary procedures, establishing a unified national system involving all registrars. They aim to enhance coordination, performance assessment, and compliance with resolution provisions through semi-annual reports submitted by registrars. Cabinet Resolution No.109 delineates rules for real beneficiary access in complex structures, mandates a risk-based approach for risk identification, and supports reporting suspicious transactions to the Financial Information Unit, strengthening the nation’s AML system.
Additionally, the amendments define nominal members and complex structures while outlining criteria to identify the real beneficial owner. They establish steps for identifying the real beneficial owner in cases where direct ownership details are unclear. Moreover, the resolution defines duties for nominee board members, stressing the need for timely information disclosure and status changes.
Furthermore, the Decision underscores the imperative of a risk management-based approach for registered enterprises to prevent money laundering and terrorism financing. It also advocates for establishing a Registrar’s AML/CFT unit responsible for implementing AML/CFT policies and submitting real-time reports to the Ministry.
Regarding administrative sanctions, the Cabinet Decision focuses on penalties for breaches of Resolution No. 109, ranging from warnings to financial penalties and potential license suspensions based on the Registrars’ discretion.
HE Al Saleh reaffirmed the Ministry’s commitment to strengthening the national AML/CFT system. They aim to raise awareness and compliance among companies, consolidating the UAE’s status as a transparent and integrity-focused global economic hub.
