AML Compliance Officer Roles and Responsibilities

Last Updated on Nov 13 , 2024, 2k Views

Anti Money Laundering

Money laundering and the financing of terrorism are financial crimes that pose detrimental effects on the economic system and society as a whole.

The “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 Organizations” was brought into force to combat the same.

These regulations are applicable to Financial Institutions (Fis), Designated Non-Financial Businesses and Professions (DNFBPs), and Virtual Asset Service Providers (VASPs) operating within the UAE.

The said legislation is formulated with the intent to aid entities with the ‘know-how’ as to how to deal with ML/FT occurrences by having a systematic structure in place.

Appointment of an AML Compliance Officer is an essential requirement that fulfills the need of having an officer with a keen eye for noticing and reporting in an unbiased, fair, and transparent manner any such suspicious activity to the appropriate authority, both within and outside the entity.

As per the UAE Anti-Money Laundering (AML) Law, Financial Institutions and Designated Non-Financial Business Professionals (DNFBPs) must appoint an AML Compliance Officer. The role of such an employee is to comply with the anti-money laundering laws- Federal Decree-law No. (20) of 2018 On Anti Money Laundering and combating the financing of terrorism. Another law is Article (11) Cabinet Decision No. (58) of 2020 Regulating the Beneficiary Owner Procedure.

The legal person or entity appoints the AML compliance officer role. They are natural persons appointed and should have the requisite experience and skills to implement a robust AML compliance process. The AML compliance officer carries on the duties on behalf of the legal person or entity who provides all the required data to the legal person or entity, follows the procedures as per the AML laws, and helps prevent money laundering activities. The AML officer should carry on the duties with utmost competence to help businesses comply with the AML laws.

Who can be appointed as an AML Compliance Officer?

An independent natural person with requisite competencies and experience can be appointed as an AML Compliance Officer of the Company. Further, the Compliance Officer must be at par with the senior managerial level person who can perform his functions without undue pressure. He must be able to make independent decisions to protect the entity from ML/FT risks.

Prior approval from the Supervisory Authority

It is necessary to obtain prior approval from the relevant Supervisory Authority, and the same can be obtained by applying on the goAML portal maintained by the FIU (Financial Intelligence Unit), UAE. The reporting entities must prepare an authorization letter favoring the designated Compliance Officer and upload the same on the goAML portal along with the following:

A copy of the passport, resident visa, and Emirates ID of the Compliance Officer A copy of the organization’s commercial or trade license Additionally, certain DNFBPs, depending on the size and nature of the business, may also consider appointing a Money Laundering Reporting Officer (MLRO) to submit various reports on the goAML portal.

The reporting entities can seek guidance from the Supervisory Authority in relation to the competence and experience expected from the Compliance Officer to enforce an effective governance structure.

Responsibilities of an AML Compliance Officer under the AML Laws

Section 8, Article 21, states the responsibilities of a Compliance Officer.

The AML compliance officer has to detect transactions relating to any crime.

The AML compliance officer needs to review the AML/CFT compliance program and processes to prevent financial crimes. He needs to align the AML/CFT framework in line with the regulatory requirements and the ML/TF risks faced by the entity.

The Compliance officer must review and evaluate suspicious transactions and activities. The Compliance Officer needs to report such transactions and activities in the form of a Suspicious Transaction Report (STR) and Suspicious Activity Report (SAR) to the FIU, UAE.

The AML compliance officer has to submit various reports like Funds Freeze Report (FFR), Partial Name Match Report (PNMR), High-Risk Country Report (HRC), High-Risk Country Activity Report (HRCA), Dealers in Precious Metals and Stones Report (DPMSR) and Real Estate Activity Report (REAR) to the Financial Intelligence Unit, UAE.

The AML compliance officer needs to conduct training for the employees, make them aware of the AML rules and regulations, and train them in the best global practices to counter the risks of financial crimes.

The AML compliance officer needs to submit periodic reports on AML compliance with the senior management and file semi-annual reports with the Supervisory Authority.

Detect transactions in Financial Crimes

The Compliance officer needs to review and evaluate data of suspicious accounts that might be concealing money laundering. The Officers can report the data to the Financial Intelligence Unit depending on the case. The transaction might be continued, and they need to state the reasons for their research. They need to collaborate with the supervisory authority and FIU to provide all the relevant data.

The AML compliance officer reviews the internal rules and processes to prevent financial crimes. He also needs to update the relevant authorities and comply with the latest rules and regulations.

The AML compliance officer has to submit the reports on the rules to the concerned authority.

To conduct AML training for the employees and make them aware of the AML rules and regulations and train them on the best industry practices. Training is imparted to employees to understand money laundering methods and implement the right processes to prevent money laundering and financial terrorism.

The AML compliance officer needs to coordinate with the Supervisory Authority and FIU, providing them with all the necessary data to help fight ML/TF risks.

The compliance officer’s duties can be categorized into two parts- Duties to the employer and responsibilities to the Government.

AML Compliance Officer Roles and Responsibilities