• AML 11. AML 11. Sanctions And Other International Obligations

    • AML 11.1 AML 11.1 Resolutions and Sanctions

      • AML 11.1.1 AML 11.1.1

        (1) A Relevant Person must establish and maintain effective systems and controls to ensure that on an ongoing basis it is properly informed as to, and takes reasonable measures to comply with, relevant resolutions or Sanctions which it is required to comply with, under the laws of ADGM or any other jurisdiction.
        (2) A Relevant Person must immediately notify the Regulator when it becomes aware that it is, for or on behalf of a Person:
        (a) carrying on or about to carry on an activity;
        (b) holding or about to hold money or other assets; or
        (c) undertaking or about to undertake any other business whether or not arising from or in connection with (a) or (b);
        where such carrying on, holding or undertaking constitutes or may constitute a contravention of any Sanctions which the Relevant Person is required to comply with, under the laws of ADGM or any other jurisdiction.
        (3) A Relevant Person must ensure that the notification stipulated in (2) above includes the following information:
        (a) a description of the relevant activity in (2)(a), (b) or (c); and
        (b) the action proposed to be taken or that has been taken by the Relevant Person with regard to the matters specified in the notification.
        Amended on (15 April, 2019).

        • Guidance

          1. In Rule 11.1.1(1), taking reasonable measures to comply with resolutions or Sanctions may include, for example, a Relevant Person not undertaking a transaction for or on behalf of a Person undertaking further due diligence in respect of a Person.
          2. Relevant resolutions or Sanctions mentioned in Rule 11.1.1 may, among other things, relate to money laundering, terrorist financing or the financing of weapons of mass destruction, or otherwise be relevant to the activities carried on by the Relevant Person. For example:
          (a) a Relevant Person should exercise due care to ensure that it does not provide services to, or otherwise conduct business with, a Person engaged in money laundering, terrorist financing or the financing of weapons of mass destruction; and
          (b) a Recognised Investment Exchange or Recognised Clearing House, as a Recognised Body, should additionally exercise due care to ensure that it does not facilitate fund raising activities or listings by Persons engaged in money laundering or terrorist financing or financing of weapons of mass destruction.
          3. A Relevant Person should be proactive in checking for, and taking measures to comply with, relevant resolutions or sanctions which the Relevant Person is required to comply with, under the laws of ADGM or any other jurisdiction. The Regulator expects Relevant Persons to perform checks on an ongoing basis against their customer databases and records for any names appearing in resolutions or sanctions which the Relevant Person is required to comply with as well as to monitor transactions accordingly.
          4. A Relevant Person may use a database maintained elsewhere for an up-to-date list of resolutions and sanctions, or to perform checks of customers or transactions against that list. For example, it may wish to use a database maintained by its head office or a Group member. However, the Relevant Person retains responsibility for ensuring that its systems and controls are effective to ensure compliance with this Rulebook.
          Amended on (3 February, 2020).

    • AML 11.2 AML 11.2 Government, regulatory and international findings

      • AML 11.2.1 AML 11.2.1

        (1) A Relevant Person must establish and maintain systems and controls to ensure that on an ongoing basis it is properly informed as to, and takes reasonable measures to comply with, any findings, recommendations, guidance, directives, resolutions, Sanctions, notices or other conclusions issued by:
        (a) the government of the U.A.E. or any government departments in the U.A.E.;
        (b) the Central Bank of the U.A.E. or the FIU;
        (c) U.A.E. enforcement agencies;
        (d) FATF;
        (e) the Basel Committee on Banking Supervision;
        (f) the Regulator; and
        (g) any other jurisdiction which promulgates Sanctions to which it is subject,
        concerning the matters in (2).
        (2) For the purposes of (1), the relevant matters are:
        (a) arrangements for preventing money laundering, terrorist financing or the financing of weapons of mass destruction in a particular country or jurisdiction, including any assessment of material deficiency against relevant countries in adopting international standards; and
        (b) the names of Persons, Groups, organisations or entities or any other body where suspicion of money laundering or terrorist financing or the financing of weapons of mass destruction exists.
        (3) For the purposes of (1), measures that a Relevant Person must undertake when taking reasonable measures to comply with findings, recommendations, guidance, directives, resolutions, Sanctions, notices or other conclusions, include, but are not limited to, measures:
        (a) requiring specific elements of enhanced CDD;
        (b) requiring enhanced reporting mechanisms or systematic reporting of financial transactions;
        (c) limiting business relationships or financial transactions with specified persons or persons in a specified jurisdiction;
        (d) prohibiting Relevant Persons from relying on third parties located in a specified jurisdiction to conduct CDD;
        (e) requiring the review and amendment, or if necessary termination, of correspondent relationships with banks in a specified jurisdiction;
        (f) prohibiting the execution of specified electronic fund transfers; or
        (g) requiring increased external audit requirements for financial groups with respect to any of their branches and subsidiaries located in a specified jurisdiction.
        (4) A Relevant Person must immediately notify the Regulator in writing if it becomes aware of non-compliance by a Person with a finding, recommendation, guidance, directive, resolution, Sanction, notice or other conclusion and provide the Regulator with sufficient details of the person concerned and the nature of the non-compliance.
        Amended on (15 April, 2019).

        • Guidance

          1. The purpose of this Rule is to ensure that a Relevant Person takes into consideration the broad range of tools used by competent authorities and international organisations to communicate Anti-Money Laundering risks to stakeholders.
          2. The Rule also permits the Regulator to require enhanced CDD or other specific countermeasures to address risks identified in a specific country or jurisdiction. The Regulator may impose such countermeasures either when called upon to do so by FATF or independently of any FATF request.
          3. Relevant Persons considering Transactions or business relationships with Persons located in countries or jurisdictions that have been identified as deficient, or against which the U.A.E. or the Regulator have outstanding advisories, should be aware of the background against which the assessments, or the specific recommendations have been made. These circumstances should be taken into account in respect of business introduced from such jurisdictions, and when receiving inward payments for existing customers or in respect of inter-bank Transactions.
          4. The Relevant Person's MLRO is not obliged to report all Transactions from these countries or jurisdictions to the FIU if they do not qualify as suspicious under Federal AML Legislation (see Chapter 14 on Suspicious Activity Reports).
          5. Transactions with counterparties located in countries or jurisdictions which are no longer identified as deficient or have been relieved from special scrutiny (for example, taken off sources mentioned in this Guidance) may nevertheless require attention which is higher than normal.
          6. In order to assist Relevant Persons, the Regulator may, from time to time, publish findings, guidance, directives or Sanctions from U.A.E. authorities, the FATF or other relevant bodies. However, the Regulator expects a Relevant Person to take its own steps in acquiring relevant information from various available sources. For example, a Relevant Person may obtain relevant information from consolidated lists of financial Sanctions published by the European Union, HM Treasury, and OFAC.
          7. In addition, the systems and controls mentioned in Rule 11.2.1 should be established and maintained by a Relevant Person taking into account its risk assessment under Chapters 6 and 7. In relation to the term "make appropriate use" in Rule 11.2.1, this may mean that a Relevant Person cannot undertake a Transaction for or on behalf of a Person or that it may need to undertake further due diligence in respect of such a Person.
          8. A Relevant Person should be proactive in obtaining and appropriately using available national and international information, for example, suspect lists or databases from credible public or private sources with regard to money laundering, including obtaining relevant information from sources mentioned in Guidance 6 above. The Regulator encourages Relevant Persons to perform checks against their customer databases and records for any names appearing on such lists and databases as well as to monitor Transactions accordingly.
          9. The risk of terrorists entering the financial system can be reduced if Relevant Persons apply effective Anti-Money Laundering strategies, particularly in respect of CDD. Relevant Persons should assess which countries carry the highest risks and should conduct an analysis of Transactions from countries or jurisdictions known to be a source of terrorist financing.
          10. The Regulator may require Relevant Persons to take any special measures it may prescribe with respect to certain types of Transactions or accounts where the Regulator reasonably believes that any of the above may pose a money laundering risk to the ADGM.
          Amended on (15 April, 2019).