11.1 Glossary of Terms
Effective from 13/7/2023| Term | Definition |
| Beneficial Owner: | Natural person who owns or exercises effective ultimate control, directly or indirectly, over a customer or the natural person on whose behalf a transaction is being conducted or, the natural person who exercises effective ultimate control over a legal person or Legal Arrangement. |
| Beneficiary Financial Institution | The Financial Institution that receives a wire transfer from an Ordering Financial Institution directly or indirectly via an Intermediary Financial Institution and makes funds available to the beneficiary. |
| Business Relationship | Any ongoing commercial or financial relationship established between Financial Institutions, Designated Non-Financial Businesses and Professions, and their customers in relation to activities or services provided by them. |
| Committee: | National Committee for Combating Money Laundering and the Financing of Terrorism and Illegal Organisations. |
| Competent Authorities: | The competent government authorities in the State entrusted with the implementation of any provision of the Decree-Law and the present Decision. |
| Correspondent Relationship: | Relationship between a correspondent financial institution and a respondent one through a current account or any other type of account or through a service related to such an account and includes a corresponding relationship established for the purpose of securities transactions or transfer of funds. |
| Crime: | Money laundering crime and related Predicate Offences, or Financing of Terrorism or Illegal Organisations. |
| Customer Due Diligence (CDD): | Process of identifying or verifying the information of a Customer or Beneficial owner, whether a natural or legal person or a Legal Arrangement, and the nature of its activity and the purpose of the Business Relationship and the ownership structure and control over it for the purposes of the Decree-Law and this Decision. |
| Customer: | Any person involved in or attempts to carry out any of the activities specified in the Implementing Regulations of this Decree Law (Articles 2 and 3 the Cabinet Resolution) with one of the Financial Institutions or Designated Non-Financial Businesses and Professions. |
| Decree-Law (or “AML-CFT Law”): | Federal Decree-Law No. (20) of 2018 On Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organisations. |
| Decision (or “AML-CFT Decision” or “Cabinet Decision”): | Cabinet Decision No. (10) of 2019 Concerning the Implementing Regulation of Decree Law No. (20) of 2018 On Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations. |
| Designated Nonfinancial Businesses and Professions (DNFBPs): | Anyone who conducts one or several of the commercial or professional activities defined in Article 3 of the Cabinet Decision, being anyone who is engaged in the following trade or business activities: 1. Brokers and real estate agents when they conclude operations for the benefit of their Customers with respect to the purchase and sale of real estate 2. Dealers in precious metals and precious stones in carrying out any single cash transaction or several transactions that appear to be interrelated or equal to more than AED 55,000. 3. Lawyers, notaries, and other independent legal professionals and independent accountants, when preparing, conducting or executing financial transactions for their Customers in respect of the following activities: (a) Purchase and sale of real estate. (b) Management of funds owned by the Customer. (c) Management of bank accounts, saving accounts or securities accounts. (d) Organising contributions for the establishment, operation or management of companies. (e) Creating, operating or managing legal persons or Legal Arrangements. (f) Selling and buying commercial entities. 4. Providers of corporate services and trusts upon performing or executing a transaction on the behalf of their Customers in respect of the following activities: (a) Acting as an agent in the creation or establishment of legal persons. (b) Working as or equipping another person to serve as director or secretary of a company, as a partner or in a similar position in a legal person. (c) Providing a registered office, work address, residence, correspondence address or administrative address of a legal person or Legal Arrangement. (d) Performing work or equipping another person to act as a trustee for a direct Trust or to perform a similar function in favour of another form of Legal Arrangement. (e) Working or equipping another person to act as a nominal shareholder in favour of another person. 5. Other professions and activities which shall be determined by a decision of the Minister |
| Egmont Group: | The Egmont Group is an intergovernmental body of 159 Financial Intelligence Units (FIUs), which provides a platform for the secure exchange of expertise and financial intelligence to combat money laundering and the financing of terrorism (ML/FT). |
| FATF: | The Financial Action Task Force is an intergovernmental body that sets international standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. |
| FSRBs: | FATF-Style Regional Bodies are regional intergovernmental organisations which promote and assess the implementation of internationally accepted AML/CFT policies and regulations. |
| Financial Group: | A group of financial institutions that consists of holding companies or other legal persons exercising the control over the rest of the group and coordinating functions for the application of supervision on the group, branch, and subsidiary level, in accordance with the international core principles for financial supervision, and AML/CFT policies and procedures. |
| Financial Institution: | Anyone who conducts one or several of the financial activities or operations of /or on behalf of a Customer. |
| Financial Transactions or Activities: | Any activity or transaction defined in Article (2) of the Cabinet Decision. |
| Financing of Illegal Organisations: | Any physical or legal action aiming at providing funding to an illegal organisation, or any of its activities or members. |
| Financing of Terrorism: | Any of the acts mentioned in Articles (29, 30) of Federal Law no. (7) of 2014 on combating terrorism offences. |
| FIU: | Financial Intelligence Unit. |
| Funds: | Assets in whatever form, whether tangible, intangible, movable or immovable including national currency, foreign currencies, documents or notes evidencing the ownership of those assets or associated rights in any forms including electronic or digital forms or any interests, profits or income originating or earned from these assets. |
| High Risk Customer: | A customer who represents a risk either in person, activity, Business Relationship, nature or geographical area, such as a customer from a high-risk country or non-resident in a country that does not hold an identity card, or a costumer having a complex structure, performing complex operations or having unclear economic objective, or who conducts cash-intensive operations, or operations with an unknown third party, or operations without directly confronting any other high risk operations identified by Financial Institutions, or Designated Non-Financial Businesses and Professions, or the Supervisory Authority. |
| Illegal Organisations: | Organisations whose establishment is criminalised or which exercise a criminalised activity. |
| Intermediary Account: | Corresponding account used directly by a third party to conduct a transaction on its own behalf. |
| Intermediary Financial Institution: | The Financial Institution that receives and sends wire transfer between the Ordering Financial Institution and the Beneficiary Financial institution or another Intermediary Financial Institution. |
| Law Enforcement Authorities: | Federal and local authorities which are entrusted under applicable legislation to combat, search, investigate and collect evidences on the crimes including AML/CFT crimes and financing illegal organisations. |
| Legal Arrangement: | A relationship established by means of a contract between two or more parties which does not result in the creation of a legal personality such as Trusts or other similar arrangements. |
| MENAFATF: | MENAFATF is a FATF-Style Regional Body (FSRB), for the purpose of fostering co-operation and co-ordination between the countries of the MENA region in establishing an effective system of compliance with international AML/CFT standards. The UAE is one of the founding members of MENAFATF. |
| Means: | Any means used or intended to be used for the commitment of an offence or felony. |
| Minister: | Minister of Finance |
| Money Laundering: | Any of the acts mentioned in Clause (1) of Article (2) of the Decree-Law. |
| Non-Profit Organisations (NPOs): | Any organized group, of a continuing nature set for a temporary or permanent time period, comprising natural or legal persons or not for profit Legal Arrangements for the purpose of collecting, receiving or disbursing funds for charitable, religious, cultural, educational, social, communal or any other charitable activities. |
| Politically Exposed Persons (PEPs): | Natural persons who are or have been entrusted with prominent public functions in the State or any other foreign country such as Heads of States or Governments, senior politicians, senior government officials, judicial or military officials, senior executive managers of state-owned corporations, and senior officials of political parties and persons who are, or have previously been, entrusted with the management of an international organisation or any prominent function within such an organisation; and the definition also includes the following: 1. Direct family members (Of the PEP, who are spouses, children, spouses of children, parents). 2. Associates known to be close to the PEP, which include: a- Individuals having joint ownership rights in a legal person or arrangement or any other close Business Relationship with the PEP. b- Individuals having individual ownership rights in a legal person or arrangement established in favour of the PEP. |
| Predicate Offense: | Any act constituting an offense or misdemeanour under the applicable laws of the State whether this act is committed inside or outside the State when such act is punishable in both countries. |
| Proceeds: | Funds generated directly or indirectly from the commitment of any crime or felony including profits, privileges, and economic interests, or any similar funds converted wholly or partly into other funds. |
| RBA: | A Risk-Based Approach is a method for allocating resources to the management and mitigation of ML/FT risk in accordance with the nature and degree of the risk. |
| Registrar: | Entity in charge of supervising the register of commercial names for all types of establishments registered in the State. |
| Sanctions Committee: | The UN Security Council Committee established as per resolution nos. 1988 (2011), 1267 (1999), 1989 (2011), 2253 (2015), 1718 (2006) and all other related resolutions. |
| Sanctions List: | A list wherein individuals and terrorist organizations, which are subject to the Sanctions imposed as per the Security Council Sanctions Committee are listed, along with their personal data and the reasons for Listing. |
| Settlor: | A natural or legal person who transfers the control of his funds to a Trustee under a document. |
| Shell Bank | Bank that has no physical presence in the country in which it is incorporated and licensed, and is unaffiliated with a regulated financial group that is subject to effective consolidated supervision. |
| State: | United Arab Emirates |
| Supervised institutions: | Financial institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBPs) which fall under the scope of Federal Decree-Law No. (20) of 2018 on Facing Money Laundering and Combating the Financing of Terrorism and Illegal Organisations, and of Cabinet Decision No. (10) of 2019 Concerning the Implementing Regulation of Decree Law No. (20) of 2018 On Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations. |
| Supervisory Authority: | Federal and local authorities, which are entrusted by legislation to supervise Financial Institutions, Designated Non-Financial Businesses and Professions and non-profit organisations or the Competent Authority in charge of approving the pursuit of an activity or a profession in case a supervisory authority is not assigned by legislations. |
| Suspicious Transactions: | Transactions related to funds for which there are reasonable grounds to believe that they are earned from any misdemeanour or felony or related to the Financing of Terrorism or of illegal organisations, whether committed or attempted. |
| TFS: | Targeted Financial Sanctions are part of an international sanctions regime issued by the UN Security Council under Chapter (7) of the United Nations Convention for the Prohibition and Suppression of the Financing of Terrorism and Proliferation of Weapons of Mass Destruction. |
| Transaction: | Any business of either dealing, structuring, advising, drafting, appearing, arranging for funding or investing, preparing documentation or disposal or use of Funds or proceeds including for example: deposit, withdrawal, conversion, sale, purchase, lending, swap, mortgage, and donation. |
| Trust: | A legal relationship in which a settlor places funds under the control of a trustee for the interest of a beneficiary or for a specified purpose. These assets constitute funds that are independent of the trustee's own estate, and the rights to the trust assets remain in the name of the settlor or in the name of another person on behalf of the settlor. |
| Trustee: | A natural or legal person who has the rights and powers conferred to him by the Settlor or the Trust, under which he administers, uses, and acts with the funds of the Settlor in accordance with the conditions imposed on him by either the Settlor or the Trust. |
| Wire Transfer: | Financial transaction conducted by a Financial Institution or through an intermediary institution on behalf of a transferor whose funds are received by a beneficiary in another financial institution, whether or not the transferor and the beneficiary are the same person. |