Government amends DIFC laws
Changes will enhance anti-money laundering and counter-terrorist financing
Dubai His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, has enacted the DIFC Regulatory Amendment Law, No. 06 of 2018. The Law, which amends the Regulatory Law of 2004, will come into force on October 29 and, together with changes to DFSA (Dubai Financial Services Authority) Anti-Money Laundering Rules, will make a number of important changes to the regulatory regime in the Dubai International Financial Centre (DIFC).
The amendments follow a self-assessment of the DIFC framework in preparation for the upcoming UAE Financial Action Task Force (FATF), Mutual Evaluation in 2019. The amendments will enhance the anti-money laundering and counter-terrorist financing, AML/CTF, regime. This will support the ongoing alignment of the DIFC regime with the FATF recommendations.
The changes include updating the DFSA’s approach to registration and supervision of Designated Non-Financial Businesses or Professions (DNFBPs). This includes a prohibition from conducting any DNFBP activities, in or from the DIFC, without registration by the DFSA. The changes also include enhancements to the supervisory regime, which will enable the DFSA to suspend or withdraw the registration of a DNFBP, if it is in breach of the Law or the Rules or other AML legislation.
In order to ensure the orderly transition of DNFBPs already established in the Centre to the new regime, the DFSA clarified that the transitional arrangements would apply over a three-month period from effective date of the Law. These matters would include confirming the identity of the Money Laundering Reporting Officer, senior management and beneficial ownership information.
The changes also strengthen the DFSA’s regulatory approach to how firms carry out Customer Due Diligence to ensure alignment with FATF Recommendations. The DFSA has prepared a Question and Answer document, addressing the most commonly posed questions in response to Consultation Papers 118 and 120, which proposed the changes discussed above.
Bryan Stirewalt, Chief Executive Officer of the DFSA, said, “The DFSA welcomes these changes and sees them as an important step towards enhancing the AML/CTF regime. I believe they will also improve the supervisory oversight of DNFBPs. We also see these as appropriate changes to support the growth of the DIFC, to continue to position it as the financial hub of choice for international firms in the region, and to contribute to the UAE’s upcoming FATF Mutual Evaluation that is due in 2019.”
“The DFSA’s work on AML will continue, to ensure our approach is in line with best international practice. We expect that there will be further enhancements to our regime as the UAE completes its preparation for the Mutual Evaluation,” he added.
The Amendments to DIFC laws, together with associated amendments to DFSA Rules, will come into force on October 29 and are available on the DFSA website.