New draft AML rules in the DIFC open for consultation

The independent financial regulator in the Dubai International Financial Centre (the DIFC), the Dubai Financial Services Authority (the DFSA), has issued a consultation paper proposing new amendments to its anti-money laundering, counter-terrorist financing and sanctions (AML) Module of the DFSA Rulebook. Consultation Paper No. 107 proposes changes and modifications to keep up to date with the 2012 Financial Action Task Force (FATF) Recommendations, the amendments to UAE Federal Law No.4 of 2002 (Federal AML Law), UAE Cabinet Resolution No. 38 of 2014 (Cabinet Resolution), and issues raised by market participants.

To ensure clarity, the "Overview and Purpose" of the AML Module is being updated to outline the application of the Federal AML Law, Cabinet Resolution, and DIFC law generally to the AML Module. Certain definitions/concepts have been added (eg "unlawful organisations", "Federal AML Legislation" and "Shell Bank"), removed (eg "Prescribed Low Risk Customers") or amended (eg "Politically Exposed Person", "Anti-Money Laundering and Suspicious Cases Unit (AMLSCU)"). The changes have been proposed in order to ensure appropriate applicability and to reduce inconsistency between the "Onshore" UAE Federal regime and the DIFC’s regime.

Further guidance and amendments have been proposed for areas where obligations were not entirely clear, or for instances where the Federal rules have changed. Such areas include:

• the use of shell banks
• anonymous accounts
• obligations/measures regarding Customer Due Diligence (CDD) and Simplified CDD (SDD)
• relying on regulated third parties for CDD outsourcing
• consideration of tax crime risks
• training and qualification requirements of employees
• suspicious activity reports (SARs)
• record retention, and
• reporting and notifying relevant authorities of certain changes.

For more details on the proposed changes, the consultation paper can be accessed here.