What Are AML and ABC?

Anti-Money Laundering (AML)

AML refers to a set of laws and controls that prevent criminals from hiding or disguising the origins of unlawful funds. AML frameworks require businesses to:

• Identify and verify customers

• Detect unusual or suspicious activities

• Report high-risk transactions

• Maintain proper records for regulatory review

In short, AML regulations help ensure the UAE’s financial system is not misused for illegal activities such as drug trafficking, fraud, or terrorist financing.

Anti-Bribery and Corruption (ABC)

ABC compliance focuses on identifying, preventing, and reporting activities involving:

• Bribery

• Corruption

• Abuse of authority

• Illegal benefits

• Fraudulent transactions

These rules promote transparency, ethical business conduct, and fair competition across both public and private sectors.

Key AML Regulations in the UAE

The UAE’s AML structure aligns with global FATF (Financial Action Task Force) standards, ensuring the country meets international expectations for combating financial crime. The main legal pillars include:

1. Federal Decree-Law No. (20) of 2018

This law forms the foundation of AML enforcement in the UAE. It:

• Defines various forms of money laundering

• Establishes reporting duties for businesses

• Imposes administrative and financial penalties for non-compliance

• Outlines investigation and prosecution procedures

It is one of the most critical regulations for companies operating in the UAE.

2. Cabinet Decision No. (10) of 2019

This Cabinet Decision provides the executive regulations that complement the above decree-law. It offers detailed guidelines on:

• Customer due diligence procedures

• Ongoing monitoring

• Beneficial ownership verification

• Suspicious transaction reporting

This regulation clarifies what businesses must do to comply effectively.

3. Central Bank Circulars & TFS Measures

The UAE Central Bank regularly issues circulars to update financial institutions on new requirements. Among these are:

• Targeted Financial Sanctions (TFS) related to UN Security Council Resolutions

• Restrictions on dealing with sanctioned individuals or entities

• Sector-specific compliance instructions

All reporting institutions must utilize the goAML platform, the UAE’s official system for filing suspicious activity reports.

Understanding ABC Compliance in the UAE

The UAE’s stance against bribery and corruption is strict and comprehensive. The key legislation includes:

Federal Decree-Law No. 31/2021 (Crimes and Penalties Law)

This law criminalizes corruption-related offenses in both public and private sectors, including:

• Offering or accepting bribes

• Misuse of authority for financial gain

• Commercial bribery

• Embezzlement

• Fraud and falsification of documents

• Concealing proceeds of unlawful activities

Penalties may include heavy fines, imprisonment, confiscation of assets, or restrictions on business activities.

Additional Emirate-Specific Regulations

Some emirates have introduced their own internal rules to reinforce transparency:

• Dubai Law No. 27 of 2006 – Strengthens integrity in government departments

• Abu Dhabi Law No. 6 of 2016 – Includes multiple anti-corruption provisions

Businesses must comply with both federal and emirate-level requirements where applicable.

Key AML/ABC Regulatory Authorities in the UAE

Several government bodies oversee compliance across different sectors:

Central Bank of the UAE

Supervises financial institutions, enforces compliance, and issues penalties.

Ministry of Economy

Oversees DNFBPs, including:

• Real estate brokers

• Auditors

• Dealers in precious metals or gemstones

• Corporate service providers

Securities and Commodities Authority (SCA)

Regulates capital market institutions and financial services companies.

Executive Office for AML/CFT

Coordinates national efforts, supports policy development, and strengthens international cooperation.

These agencies work together to maintain a transparent, corruption-free financial environment.

Compliance Responsibilities for Businesses

Whether you are a financial institution, real estate broker, gold trader, or accounting firm, AML and ABC compliance is mandatory. Core obligations include:

1. Conducting KYC and Customer Due Diligence

Businesses must identify customers, verify beneficial owners, assess risk levels, and update client information regularly.

2. Reporting Suspicious Activities via goAML

Any suspicious or unusual transaction—regardless of amount—must be reported immediately through the UAE’s official reporting system.

3. Implementing Regular Staff Training

Employees should understand AML laws, red flags, transaction monitoring, and reporting procedures. Training must be ongoing and documented.

4. Conducting Risk Assessments

Organizations must evaluate their exposure to:

• Money laundering

• Bribery

• Corruption

• Fraud risks

Internal controls and compliance frameworks should be established based on these assessments.

Failure to follow these obligations can lead to severe consequences.

Why AML and ABC Compliance Matters

1. Protecting the UAE’s Financial System

Strong compliance measures prevent criminals from exploiting the financial sector and help maintain economic stability.

2. Enhancing International Reputation

Robust AML and ABC systems improve investor confidence and attract foreign investment—supporting national growth goals.

3. Avoiding Heavy Penalities

Non-compliance may result in:

• High monetary fines

• Licence suspensions

• Criminal charges

• Business closure

Compliance is not optional—it’s essential for business continuity.

Enforcement and Penalties in the UAE

The UAE maintains zero tolerance toward financial crime. Authorities conduct periodic inspections, audits, and investigations to ensure businesses are following the law.

Recent years have seen:

• Increased fines for weak AML controls

• Public disclosure of non-compliant entities

• Enhanced cooperation between government and private stakeholders

• Strict enforcement of financial sanctions relating to terrorism or UN mandates

The goal is to ensure businesses operate responsibly and transparently.

While this guide offers a complete overview, AML and ABC compliance can be complex depending on your industry. Swenta, a trusted audit, accounting, and tax advisory firm, provides tailored compliance support, including:

• AML/ABC policy development

• Risk assessment frameworks

• Internal control design

• goAML registration guidance

• Staff training programs

• Ongoing monitoring and reporting support