Ministry of Economy imposes fines worth AED 65.9 million

on 137 DNFBP companies in Q1 2023

840 companies were inspected, during which, a total of 831 violations were found

The Ministry of Economy (MoE) revealed that fines worth AED 65.9 million were imposed on 137 companies operating in the country’s Designated Non-Financial Businesses and Professions (DNFBP) sector in the first quarter of 2023. The initiative forms part of the Ministry’s periodic monitoring plan to ensure the sector’s compliance with the provisions stipulated in Federal Decree-Law No. 20 of 2018 on Anti-Money Laundering and Countering the Financing of Terrorism and illegal organizations (AML/CFT), its executive regulations and related laws. These measures are key to ensuring the UAE’s full compliance with international standards issued by the Financial Action Task Force (FATF).

The Ministry stated that it conducted inspections on 840 companies, during which, a total of 831 violations were found. This included failure to notify the Financial Information Unit by raising a suspicious transaction report while carrying out due diligence on customers before establishing a business relationship with them, which led to the imposition of fines worth AED 808 million on 44 companies. The violations also included failure to adopt necessary measures and procedures to identify the risks of crime in the field of work, and failure to verify customer databases and transactions against names included in the terrorism lists, in addition to not verifying the identity of the customer and the real beneficiary.

The Ministry of Economy explained that fines worth AED 37.5 million were imposed on 66 companies engaged in the trading and manufacturing of precious metals and stones, which accounted for 57 per cent of the total fines imposed. Besides, 40 companies practicing real estate brokerage activities accounted for 25 per cent of the total violations that resulted in fines worth AED 16.5 million. Apart from that, fines worth AED 806 million were levied on 20 companies operating in the corporate service providers sector, while 12 auditing companies were fined AED 3.3 million, taking the total to AED 65.9 million in Q1 2023.

H.E. Abdullah Sultan Al Fan Al Shamsi, Assistant Undersecretary of the Ministry of Economy for Control and Follow-up Sector and Chairman of the committee for the imposition of fines on violators, said: “The UAE has made great progress in strengthening its legislative and supervisory ecosystem to confront money laundering crimes in the country, in accordance with the best practices followed globally in this regard."

“The Ministry of Economy continues to strengthen its supervision on the DNFBP sector by intensifying inspection tours to deter violators, to ensure the highest levels of compliance with the AML legislation in force in the country. This will help enhance the UAE's position as a global financial hub that follows the highest standards of transparency and confronts suspicious practices in its business environment.” He added.

H.E. Al Shamsi affirmed that the main goal behind the imposition of fines is to raise the level of compliance and adherence to international requirements, support the competitiveness of the national business environment and consolidate its position as an attractive and sustainable destination for investments and innovative projects. He explained that the Ministry, in tandem with its supervision and inspection efforts, provides extensive awareness support to DNFBP companies to enhance awareness on the risks of money laundering crimes.

Safia Al Safi, Director of the Anti-Money Laundering Department at the Ministry of Economy, said: “The Ministry is keen to fully implement the inspection plans for this year as we were able to double the number of field inspectors to 60 by the middle of this year. This will help us increase the number of technical inspection reports to more than 3,360 by the end of 2023.” She emphasized that the Department's work team effectively practices desk and field inspections extensively to implement the objectives of the regulatory plan for 2023.

Meanwhile, Counselor Salem Al Tunaiji, Head of the Investigation and Enforcement Department and member of the Administrative Penalties Committee at the Ministry of Economy, said: “The Ministry is working to ensure that the UAE’s DNFBP sector submits suspicious transaction reports (STR) to the Financial Information Unit, in addition to the efforts to implement its inspection plan, thus strengthening the Ministry's role in confronting financial malpractices.”

He affirmed that the Committee levies fines on violators in accordance with the legislation in force and a specific work methodology. He added that more reports are currently being studied by the Investigation and Enforcement Department, and that more violators will be fined, to create a safe economic environment that is free of money laundering and terrorism financing crimes in the UAE.