The UAE’s AML/CFT framework, primarily governed by Federal Decree-Law No. 20 of 2018 on Anti-Money Laundering and Counter Financing of Terrorism (as amended), mandates that financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs) report certain types of transactions to the relevant authorities. This is something our Fractional MLRO may also do for your company.

• Suspicious Transaction Report (STR):

• • • An STR must be filed with the Financial Intelligence Unit (FIU) if a transaction, attempted transaction, or series of transactions is deemed suspicious.

    • A suspicious transaction is one that raises red flags or gives rise to reasonable grounds to suspect that it may be related to money laundering, terrorist financing, or other predicate offenses. Financial institutions should pay close attention to complex transactions, those with no clear economic or lawful purpose, or those deviating from the customer’s known business or personal activities.

  • Currency Transaction Report (CTR):

    • This threshold is defined by the regulatory authorities and may vary depending on the type of financial institution and the currency involved. In the UAE, this threshold is AED 55,000. Financial institutions must also establish internal policies and procedures for aggregating transactions to identify potentially suspicious activity that may involve structuring.

  • Cross-Border Transaction Reports: These reports track the movement of funds across international borders. They are crucial for detecting money laundering schemes that involve multiple jurisdictions, as criminals often try to obscure the origin of funds by moving them through various countries. These reports help the FIU and other authorities to monitor cross-border financial flows and identify potential risks.

  • Large Cash Transaction Reports:  Similar to CTRs, these reports focus specifically on large cash transactions, but the threshold for reporting may differ. These reports are essential because cash is a highly liquid asset that can be easily used for money laundering. Financial institutions must establish controls to identify and report such transactions.

  • Wire Transfer Reports:  Wire transfers, especially international wire transfers, are a common method used for money laundering, as they allow for the rapid movement of large sums of money. These reports provide details about the sender and recipient of the funds, as well as the amount and purpose of the transfer. Financial institutions must ensure that wire transfers include accurate and complete originator information, and they must scrutinize transactions for any red flags.

  • FFR (Funds Freeze Report):  When authorities issue a freezing order on funds or assets, financial institutions and DNFBPs are required to report these to the relevant authorities. This report confirms that the freeze has been implemented. It is critical that financial institutions have the systems and procedures in place to act on and report these orders promptly.

  • PNMR (Partial Name Match Report):  This report is submitted when a customer or transaction partially matches an entry on a sanctions list, requiring further investigation to determine if it is a true match. Financial institutions must have effective screening processes to detect potential matches and procedures for investigating and reporting them.

  • REAR (Real Estate Activity Report):  This report details real estate transactions that meet certain criteria, as this sector can be vulnerable to money laundering. Real estate transactions involving shell companies, complex ownership structures, and cash payments above certain thresholds should be closely scrutinized and reported.

  • DPMSR (Dealers in Precious Metals and Stones Report):  This report is used by dealers in precious metals and stones to report transactions that meet specific thresholds or involve suspicious circumstances. Dealers in these high-value items must be vigilant for transactions involving large cash payments, false invoicing, and other red flags.

  • HRCTR (High Risk Country Transaction Report):  Financial institutions are required to report transactions involving countries deemed to be high-risk for money laundering or terrorist financing. These reports are essential for monitoring financial flows to and from high-risk jurisdictions.

  • HRCAR (High Risk Country Activity Report):  In addition to reporting individual transactions, institutions may need to provide periodic reports on overall activity involving high-risk countries. This provides a broader picture of the institution’s exposure to high-risk jurisdictions.