Article 16.1 of the AML-CFT Law and Article 60 of the AML-CFT Decision require LFIs to promptly apply directives issued by the Competent Authorities of the UAE for implementing the decisions issued by the United Nations Security Council under Chapter VII of the Charter of the United Nations. In furtherance of this requirement, the Cabinet Decision 74 of 2020 sets out the legal and regulatory framework in the UAE regarding Targeted Financial Sanctions (“TFS”), including the Local Terrorist List and the UN Consolidated List. For more information, please consult the Executive Office of the Committee for Goods and Material Subjected to Import and Export Control’s Guidance on TFS for Financial Institutions and Designated Non-financial Business and Professions and Virtual Assets Service Providers¹⁰, the CBUAE’s Guidance for LFIs on the Implementation of TFS, and Guidance for LFIs on Transaction monitoring and Sanctions screening¹¹.

LFIs should take appropriate steps to develop, implement and regularly update an appropriate Sanctions Compliance Program in order to fulfil their obligation to comply with the related requirements that includes screening of customers and transactions. LFIs should be aware that, for all PPS they offer, they should have in place operational systems that ensure they can appropriately screen transactions related to those products or services. If they cannot conduct appropriate screening, they should not offer that product or service. LFIs should also ensure that the required information fields are created and duly transmitted throughout the payment cycle across the different PPS. LFIs should screen all information they have about a transaction, including any messages between users engaging in a peer-to-peer transfer that may have a non-uniform number of characters, use special characters, or present other challenges to screening systems.

An LFI that does not wish to have any exposure to high-risk countries will need to take additional measures to control where its customers use its products or services. Furthermore, sanctions risk assessments can change from time to time depending on where a customer is currently located. In intermediated correspondent relationships, LFIs should ensure that they fully understand their correspondents’ sanctions screening approaches, and should not process any payments for a correspondent unless they are entirely confident that the correspondent conducts appropriate screening. LFIs cannot rely on another LFI to fulfill screening obligations related to transactions on their own accounts or systems.

Furthermore, LFIs must sign up for the Integrated Enquiries Management System (“IEMS”) introduced by the UAE FIU to automate and facilitate the execution process of requests for information, implementing decisions of public prosecutions and any other type of ML/FT requests. Via this system, the FIU can make requests to all LFIs simultaneously with the goal of processing requests and providing results to law enforcement authorities more efficiently. For more information, please consult the IEMS User Guide published by the UAE FIU.¹²

¹⁰ Available at https://www.uaeiec.gov.ae/en-us/un-page#
¹¹ Available at https://www.centralbank.ae/en/cbuae-amlcft
¹² Available at https://www.uaefiu.gov.ae/media/jtdnttby/integrated-enquiry-management-system.pdf