Financial laws compliance is a must for UAE firms

Full compliance is the only solution for companies in the UAE when it comes to anti-money laundering laws and other regulatory requirements, industry executives said at a conference in Dubai on Saturday.

Sridhar Rajam, director of AJMS Global, said when it comes to compliance, the biggest challenge companies face is implementation as it entails additional costs.

He pointed out that industries with the highest risk globally are gold jewellery, real estate, general trading and auction houses because a lot of cash transactions are happening; as such, identifying source of funds and documents have become difficult.

Rajam pointed out that capital adequacy, segregation of departments, reporting hierarchy, system modification and enhancement of staff knowledge are some of the major challenges.

"Compliance is the requirements of banks that these sectors have been classified as high risk. Because we don't know what is the nature of the business," Rajam said while addressing the Anti-Money Laundering, Insurance and Liabilities Conference hosted by the Institute of Chartered Accountants of India (ICAI) - Dubai Chapter.

Ahmad Fadly, director for governance risk and compliance at AJMS Global; Manoj Fadnis, former president of ICAI; Mahmood Bangara, chairman of ICAI - Dubai Chapter; Osama Al Rahma, CEO of Al Fardan Exchange; Michael Wong, head of AML compliance at Emirates NBD; Mustafa Vazayil, founder and managing director of Gargash Insurance Services; and Mamoon Khan, partner for banking and finance at Al Tamimi & Co, also highlighted and addressed compliance and anti-money laundering issues during the event.

He noted that around 80 per cent of companies are doing good business, so it is the 20 per cent of firms where the accountants and concerned personnel need to be cautious and take a call on it.

Bangara said countries around the world have been witnessing multiple challenges, forcing them to revisit the existing legal and regulatory framework and the new laws to be put in place.

"The quantum and the course of transactions arising out of Illegal activities or targeted towards undesirable objectives, cause serious threat to the peace, stability and the fiscal systems. Chains of these transactions are being processed with no visible origin or destination, but mostly being painted to hide its bad characteristics. Terrorism, corruption and human trafficking is only a few of them who has started shaking the economies, social life and financial systems," he added.

Abhishek Jajoo, partner and CEO of AJMS Global, said compliance now cuts across different industries and is not limited to financial sector.

"Given the new law implemented in UAE for anti-money laundering, it is important that each business group ensure full compliance in dealings with counter parties and customers," Jajoo said.

While addressing the conference, Bangara noted that AML rules and regulations rose to global recognition when the FATF was formed in 1989 at a G7 summit, along with a framework for international standards for fighting money laundering.

He said the Central Bank of the UAE has been issuing regular guidelines in that regards. "With the expansion of anti-money laundering programmes, criminal penalties for this crime have also substantially increased," Bangara added.