1 Sanctions Obligations and Freezing Without Delay
يسري تنفيذه من تاريخ 15/8/2021Targeted Financial Sanctions (TFS) are legal restrictions on financial activity imposed by the United Nations Security Council (UNSC) or the UAE. An individual or legal person subject to TFS cannot send or receive money, or engage in any other kind of financial activity, without specific permission from the government of the UAE. The names of individuals or legal persons that are subject to TFS are included in lists published by the UN and the UAE (also known as "listed persons'' or "sanctioned persons.'')
RHP are required to fully comply with the obligation to implement all necessary measures without delay as described in the Cabinet Decision No. (74) of 2020, the ''Guidance on TFS for FIs and Designated Non-Financial Business and Professions (DNFBPs)'' issued by the Executive Office of the Committee for Goods & Material Subject to Import and Export Control (''Executive Office''), the ''Guidance for LFIs on the implementation of TFS'' issued by the CBUAE, the CBUAE Notice No. 3895/2021, and any of their amendments or updates thereof.5 RHP should be aware that it is a crime in the UAE to provide funds or financial services, including money transmissions services, to a person subject to TFS. This means that if a person is subject to TFS, the RHP cannot do any of the following:
| • | Send that person money on behalf of a customer, no matter where in the world they are; | |||||
| • | Provide that person with money that another person has sent them; or | |||||
| • | Carry out a transaction of any kind for that person. | |||||
Appropriate implementation of TFS has four key steps, which RHP must follow to ensure they are compliant:
| 1. | Maintain awareness of UNSC and UAE sanctions lists, and rapidly become informed of changes to these lists. | |||
RHP should rely on the official website of the UNSC for the most updated UN Consolidated List:
| • | https://www.un.org/securitycouncil/content/un-sc-consolidated-list | |||
RHP should rely on the official website of the Executive Office to obtain the most recent publication of the UAE sanctions List (Local Terrorist List) List issued by the UAE Cabinet:
| • | https://www.uaeiec.gov.ae/en-us/un-page | |||
| • | https://www.uaeiec.gov.ae/ar-ae/un-page | |||
In addition, under Article 21 of Cabinet Decision 74, RHP must register on the Executive Office's website in order to receive automated email notifications with updated and timely information about the listing and de-listing of individuals or entities in the Local Terrorist List and in the UN Consolidated List.
| 2. | Check the names of customers against the lists of sanctioned persons. | |||
Every time an RHP carries out a transaction, it must check before it sends or receives any money to make sure its customer, counterparty, or anyone else involved in the transaction is not listed on the UN or UAE sanctions lists. This process is known as 'screening process.' The RHP must screen the customer and the person to or from whom the customer is sending or receiving money. Where the customer is a legal person, it must screen the customer's beneficial owners (see section 3.3.3 below) and senior managing official. The RHP must also screen its counterparty who is executing the transaction at the other end. The result of the screening process can have the following results:
| • | A ''confirmed match''; i.e. a customer or a customer's counterparty has the same full name as a sanctioned person; or | |||
| • | A ''potential match''; i.e. a customer or a customer's counterparty has a similar or partially matching name as a sanctioned person; in those cases, the RHP should use additional information, such as the person's date of birth, address, and nationality, to distinguish the two persons. | |||
In addition, every time there is a change to the sanctions lists, the RHP must compare the newly listed persons against its list of past customers. If an RHP finds that it previously carried out a transaction involving a person who was not listed at the time but is now listed, it has not done anything wrong. But it must report the transaction so that the authorities are aware (see step 4 below).
| 3. | Immediately freeze any funds in the possession or under the control of the RHP that may belong to a listed person and cancel (where possible) any transactions involving a listed person. | |||
When a ''confirmed match'' is found through the screening process, RHP must immediately, without delay and without prior notice, freeze all funds.
| i. | ''Freeze all funds'' means that you must hold the funds. You cannot send them or give them to anyone except to a UAE authority. You cannot return them to the person who gave them to you. If the funds are cash, you should place the funds in a safe place, separate from other funds, until the authorities can collect them. If the funds are held in a financial institution, such as a bank, you should notify the financial institution, who will place them in a special account. If an RHP has recently completed a transaction that involves a listed person, the RHP should notify its counterparty so that they can freeze the funds at the other end if possible. It must keep records of the information that it used to confirm this. | |||
| ii. | ''Without delay'' means within 24 hours of the listing decision being issued by the UNSC, the Sanctions Committee or the UAE Cabinet, as the case may be. This means that you must take active efforts to become aware of changes to the sanctions lists by registering on the Executive Office's website in order to receive automated email notifications, and that once a change has been made, you must immediately put it into effect by refusing to carry out any transactions for or with a listed person. | |||
| iii. | ''Without prior notice'' means that you must not tell the customer, or the person whose funds are being frozen, what the RHP is going to do. | |||
When a ''potential match'' is found through the screening process, the RHP must suspend without delay any transaction and refrain from offering any funds or services. It must keep records of the information that it used to confirm this.
| 4. | Report any listed persons and the actions the RHP has taken to the appropriate authorities | |||
With regards to LFIs obligation for TFS reporting, the CBUAE in coordination with the Executive Office, has established a unified mechanism to report TFS obligations utilizing the UAE Financial Intelligence Unit's (FIU) online reporting platform (goAML).
In case of any ''confirmed match'' to a listing of names of individuals or legal persons to the Local Terrorist List and the UN Consolidated List, the RHP are required to report any freezing measures, prohibition to provide funds or services or any attempted transactions via the goAML platform within two business days by selecting the Fund Freeze Report (FFR). The RHP must also ensure all the necessary information and documents are submitted.
In case of any ''potential match'' to a listing of names of individuals or legal persons to the Local Terrorist List or UN Consolidated List, the RHP are required to report the potential match via the goAML Platform by selecting the Partial Name Match Report (PMNR). The RHP must also ensure all the necessary information and documents are submitted. In addition, the RHP must uphold suspension measures related to the ''potential match'' until further instructions are received via the goAML Platform on whether to cancel the suspension or implement freezing measures.
The TFS related reports (FFR or PMNR) submitted via the goAML Platform will be received simultaneously by the CBUAE and the Executive Office. RHP should also consult the CBUAE's6 and the Executive Office's7 websites respectively as updated from time to time.
5 Available at https://www.centralbank.ae/en/cbuae-amlcft.
6 Available at: https://www.centralbank.ae/en/cbuae-amlcft
7 Available at: https://www.uaeiec.gov.ae/en-us/un-page