In 2008, the Financial Action Task Force (FATF) reviewed the legal measures the UAE had implemented to counter money laundering and the financing of terrorism. The FATF concluded that these measures were reasonably effective, but noted that UAE lacked the resources to investigate suspected money laundering properly.
As such, the new 2018 law was designed to further strengthen the country’s ability to combat money laundering, considering ways for increased foreign investment, greater confidence in the domestic financial system, and more cooperation from the other member governments of FATF. However, challenges might be encountered.
To achieve the desired results, joint efforts from both the public and the private sectors are needed. Also, further development of the financial system will be necessary, with emphasis on effective compliance with local regulatory laws, international requirements, and best practices.
All types of UAE entities need to implement pro-active compliance programmes that meet regulatory requirements. They also need to seek advice on how to build the necessary internal capacity. However, implementation gaps when it comes to enforcement within these entities might be encountered. Moreover, institutions might face challenges when coping with strict onboarding processes, in which gathering enough KYC documentation and information could be difficult from customers across the region.
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