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16.4 Appointment of the Compliance Officer

N 35/2018 STA
  1. 16.4.1The Licensed Person must appoint a Compliance Officer who must be given the specific responsibility of managing its AML/CFT compliance function;
  2. 16.4.2The Compliance Officer of the Licensed Person must:
    1. a)be a member of Senior Management;
    2. b)report directly to the Board of Directors (or to the Owner/Partners where there is no Board of Directors);
    3. c)be provided with sufficient resources including time, systems, tools and support staff depending on the nature, size and complexity of its business; and
    4. d)be provided with unrestricted access to all information related to products or services, business partners, correspondent agents, remittance partners, customers and transactions.
  3. 16.4.3The following are some of the major responsibilities of the Compliance Officer (the list is not exhaustive):
    1. a)Design an appropriate AML/CFT compliance program for the Licensed Person to remain compliant with applicable AML/CFT Laws, Regulations, Notices, the Standards and international best practice at all times;
    2. b)Establish and maintain appropriate AML/CFT policies, procedures, processes and controls;
    3. c)Ensure day-to-day compliance of the business against internal AML/CFT policies and procedures;
    4. d)Act as the key contact point regarding all AML/CFT related matters/ queries from the Central Bank and any other competent authorities;
    5. e)Receive suspicious transaction alerts from employees and analyze them to take appropriate decisions to report all suspicious cases to the FID;
    6. f)On-going monitoring of transactions to identify high-risk, unusual and suspicious customers/transactions;
    7. g)Submit Suspicious Transaction Reports to the FID in a timely manner;
    8. h)Cooperate with and provide the FID with all information it requires for fulfilling their obligations;
    9. i)Develop and execute AML/CFT training programs considering all relevant risks of ML/FT and financing illicit organizations including the ways/means for addressing them;
    10. j)Provide necessary reports to the Board of Directors (or to the Owner/Partners where there is no Board of Directors) on all AML/CFT issues, on a quarterly basis at a minimum;
    11. k)Arrange to retain all necessary supporting documents for transactions, KYC, monitoring, suspicious transaction reporting and AML training for the minimum period for record retention as per Paragraph 16.24 of this Chapter;
    12. l)Conduct regular gap analysis between the Licensed Person’s existing AML/CFT Procedures and current Laws, Regulations, Notices and the Standards of the UAE in order to determine the extent of the Licensed Person’s level of compliance;
    13. m)Propose actions required to address gaps, if any; and
    14. n)Prepare Bi-Annual Compliance Reports in accordance with Paragraph 16.25 of this Chapter.
  4. 16.4.4The Compliance Officer must have the following qualifications and experience at a minimum:
    1. a)If the Licensed Person is in possession of a Category A License:
      • •A minimum of three (3) years of experience in AML/CFT compliance, audit or risk management within any financial institution(s).
    2. b)If the Licensed Person is in possession of either a Category B or Category C License:
      • •A minimum of eight (8) years of experience in AML/CFT compliance, audit or risk management within any financial institution(s); or
      • •A minimum of five (5) years of experience in AML/CFT compliance, audit or risk management within any financial institution(s) and possess a specific certification related to AML/CFT compliance.
    3. c)Examples of specific certifications related to AML/CFT compliance includes ACFCS, CFE, ICA Diplomas, CAMS or any other certification associated with financial crime control or AML/CFT compliance which is acceptable to the Central Bank; and
    4. d)The Compliance Officer, in all above cases, must possess sound knowledge of all applicable AML/CFT Laws, Regulations, Notices, the Standards and other relevant international best practices.
  5. 16.4.5Grace Period to comply with Paragraph 16.4.4 of this Chapter:
    1. a)A Licensed Person, who has obtained the license to carry out Exchange Business prior to the date of issuing the Standards, must comply with the requirements of Paragraph 16.4.4 of this Chapter on or before 31st December 2018; and
    2. b)Regardless of the grace period under Paragraph 16.4.5 (a) of this Chapter, the Central Bank reserves the right to instruct any Licensed Person to comply with the requirements of Paragraph 16.4.4 of this Chapter at any time prior to 31st December 2018, if it deems it necessary.
  6. 16.4.6Employment Type and Residential Status of the Compliance Officer:
    1. a)The Compliance Officer must be a full time employee of the Licensed Person;
    2. b)The Compliance Officer must not engage in any part time employment or act as a consultant outside the business of the Licensed Person;
    3. c)The Compliance Officer must be a resident in the UAE; and
    4. d)A foreign national must be under the employment visa of the Licensed Person when employed as a Compliance Officer.
  7. 16.4.7Conflict of Interest in Multiple Roles:
    1. a)The role of Compliance Officer must not be combined with any other functions of the Licensed Person.
  8. 16.4.8Reporting Lines and Independence:
    1. a)The Compliance Officer must directly report to the Board of Directors (or to the Owner/Partners where there is no Board of Directors); and
    2. b)The Compliance Officer must have authority to act without any interference from the Manager in Charge or other employees of the Licensed Person.
  9. 16.4.9Prior Approval for Appointment:
    1. a)A Letter of No Objection must be obtained for appointing a Compliance Officer by submitting the following documents to the Banking Supervision Department:
      • •Letter from the authorized signatory of the Licensed Person seeking the Letter of No Objection from the Central Bank;
      • •Duly completed APA Form (Refer to Appendix 5 for this Form) along with all required supporting documents; and
      • •Undertaking letter from an authorized signatory of the Licensed Person confirming the binding commitment of the Compliance Officer and the Licensed Person to comply with Paragraphs 16.4.6, 16.4.7 and 16.4.8 of this Chapter.
    2. b)The Central Bank shall conduct a fit and proper test on the proposed Compliance officer of the Licensed Person. The Central Bank reserves the right to:
      • •interview the proposed Compliance Officer as part of the fit and proper test, if it deems it necessary; and
      • •issue or decline the approval for the proposed Compliance Officer.
    3. c)In case the prior approval is rejected by the Central Bank, the Licensed Person must propose a new Compliance Officer within the timeline provided by the Central Bank in the Letter of Rejection. If a specific timeline is not provided in the Letter of Rejection, then the Licensed Person must propose a new Compliance Officer within a period of one hundred and eighty (180) calendar days from the date of Letter of Rejection; and
    4. d)Full details of the Compliance Officer must be provided to the FID via email to: cbuaeamlscu@cbuae.gov.ae (Refer to Notice Number 1401/2010 issued by the Central Bank on 16th March 2010).
  10. 16.4.10Resignation of the Compliance Officer and Notification to the Central Bank:
    1. a)The Licensed Person must notify the Banking Supervision Department, within five (5) working days, in case the Compliance Officer resigns or vacates the office in any other manner with reason thereof via email to: info.ehs@cbuae.gov.ae;
    2. b)The Licensed Person must appoint a permanent replacement, within a period of one hundred and eighty (180) calendar days from the date when the position of the Compliance Officer falls vacant, after obtaining a Letter of No Objection from the Banking Supervision Department (Refer to Paragraph 16.4.9 of this Chapter for more information); and
    3. c)The Alternate Compliance Officer must be available to ensure the continuity of the AML/CFT compliance function during the period when the Compliance Officer’s position is vacant.
  11. 16.4.11Outsourcing of Compliance Function:
    1. a)The Licensed Person must not outsource the role of the Compliance Officer nor the entire compliance function under any circumstances. However, the Licensed Person is permitted, under certain circumstances, to outsource some specific AML compliance tasks after obtaining the Letter of No Objection from the Banking Supervision Department. Please refer to Paragraph 9.1.2 (a) of Chapter 9.
  12. 16.4.12Removal of the Compliance Officer:
    1. a)The Central Bank reserves the right to remove the Compliance Officer of a Licensed Person at its sole discretion;
    2. b)The Licensed Person, in such cases, must comply with Paragraph 16.4.10 (b) of this Chapter; and
    3. c)The Central Bank reserves the right to communicate or not to communicate reasons to the Licensed Person for its decision to remove the Compliance Officer.