Current ML/TF Scenario:

Money Laundering (ML) and Terrorist Financing (TF) including proliferation financing (PF) are a serious threat to the global financial system and can disrupt the stability and integrity of the global economy, more so, as technological advancements are also exploited for such illicit activities. As part of this global scenario, cybercrime, ransomware, virtual assets and identity theft among others are the emerging risks that we have to cope with.

Global AML/CFT Initiatives:

As ML/TF/PF is a global phenomenon, a concerted global approach is on-going to combat this menace, through various govt. agencies, UN and other International Organizations, in particular, the Financial Action Task Force (FATF) – the inter-governmental body which was assigned to set international standards on ML/TF/PF. The FATF Recommendations of 2012 and amendments thereto, has set out the basic framework to detect, prevent and mitigate the risks arising from ML/TF/PF. Most of the countries in the world adhere to these international standards to combat ML/TF/PF. Obviously, international cooperation is a crucial element in this regard.

UAE Risk Assessment:

The United Arab Emirates (UAE) contributes to global anti money laundering efforts and combating financing of terrorism (AML/CFT), and strives to implement fully the standards set by the Financial Action Task Force (FATF). Financial Institutions (FI) are considered key partners in delivering the UAE’s AML/CFT program. The UAE designed an outreach program to provide the private sector and FI with an understanding of its National Risk Assessment (NRA) and the most vulnerable sectors thus identified.

UAE Legal and Regulatory Environment on AML/CFT:

UAE, in line with the global efforts have taken various legal, regulatory and institutional measures to fight ML/TF/PF. The measures are ever evolving in order to counter the evolving nature of these crimes. The UAE National Anti-Money Laundering and Combating Financing of Terrorism and Financing of Illegal Organizations Committee (NAMLCFTC) is the primary body for policy making and issuing regulations. It has formulated a National Strategy with 12 Strategic Goals to combat ML/TF/PF. The UAE AML/CFT framework is based on the following, among others:
1) Decretal Federal Law No. (14) of 2018 regarding the Central Bank and organization of financial institutions and activities.
2) Federal Decree Law No. (20) of 2018 on AML/CFT and combating financing of Illegal Organizations.
3) Cabinet Decision No. (10) of 2019 concerning the implementing the regulation of Decree Law No. (20) of 2018.
4) Federal Decree Law No. (26) of 2021 amending certain provisions of Federal Decree Law No. (20) of 2018.
5) Cabinet Resolution No. (24) of 2022 on combating ML/TF and financing of Illegal Organizations.
6) Cabinet Decision No. (74) of 2020 regarding terrorism lists regulation and implementation of UNSCRs on the suppression and combating of terrorism, terrorism financing, countering the proliferation of WMD and its financing and relevant resolution.
7) Cabinet Decision No. (58) of 2020 regulating the beneficial owner procedures.
8) CBUAE Board of Directors Decision No. 59/4/2019 regarding procedures for AML/CFT and combating illegal organizations.
9) The Standards for the Regulations regarding licensing and monitoring of exchange business issued by CBUAE in February 2018.
10) Chapter 16 of the Standards – version 1.20 of Nov. 2021
11) AML/CFT Guidance/Circulars from CBUAE and the Executive Office for Control and Non-Proliferation (EOCN) on Targeted Financial Sanctions and other relevant issues.

The Central Bank of the UAE which regulates financial institutions in the UAE including exchange houses, established a dedicated department in August 2020 (AMLD) to handle all AML/CFT matters and this reflects the commitment of CBUAE to maintain the integrity of the financial sector in the UAE. As for Sanctions, the Executive Office for Control and Non-Proliferation (EOCN) in the UAE, plays a key role in providing guidance and training to the financial and DNFBP sector in the UAE.

AML/CFT framework in OEC:

OEC is committed to fully comply with the UAE AML/CFT laws and regulations/standards as well as adopted international best practices and guidelines from FATF, Basel, Wolfsberg Group and other similar organizations, as appropriate. As regards to Sanctions, OEC complies with all applicable requirements where it conducts business or has business relationships.

OEC’s compliance framework is on a risk-based basis and comprises of the following:
- The Board is actively engaged in overseeing the AML/CFT compliance function and has set a ‘Tone at the Top’ that it has a zero tolerance for ML/TF/PF, fraud and related financial crimes and has established effective policies/procedures and internal controls in this regard.
- As part of corporate governance on AML/CFT, adopted the three lines of defence (first line-business and operations, second line-compliance and risk, and third line-internal audit).
- Appointed a Chief Compliance Officer and Alternate Compliance Officer with reporting line to the Board.
- Established the compliance committee and audit committee as per regulatory requirements.
- Established AML/CFT policies, procedures, systems and controls.
- Customer on-boarding process (KYC: CID/CDD/EDD) and risk grading of customers (risk-based approach) and on-going due diligence.
- Effective transaction monitoring and sanction screening (implementing UNSCRs, UAE list and other sanctions lists) and testing/validation of the system on a periodic/event driven basis.
- Disposition of false positives and review of parameters and scenarios in line with typology assessment.
- Enterprise-wide ML/TF risk assessment and its periodic update.
- Identification and reporting of suspicious transactions and other reports related to sanctions (funds freeze report and partial name match report).
- List maintenance (internal watch list, black list and whitelisting of customers).
- Post STR transactions of customers and exit policy.
- Record keeping requirements.
- Risk register and its maintenance.
- Recruitment policy and employee screening.
- Management reporting system (MIS).
- Independent Audit of the compliance function – Internal/External.
- Process to address promptly any deficiencies highlighted by Audit.
- Maintaining correspondent banking relationships.
- Maintaining confidentiality and data security.
- Policy for PEPs and other high-risk customers/countries.
- Cyber Security.
- AML/CFT Training.

OEC considers training as one of its main pillars to combat ML/TF/PF and this is an on-going process. All relevant staff, Board members and senior management are provided training as per the training calendar to fulfill their roles efficiently and to be aware of the evolving laws/regulations and OEC AML/CFT policy. We believe that technological developments (AI, machine learning, data analytics) play a very important role in the overall AML/CFT framework and we have taken a pragmatic approach to incorporate this in our framework, as appropriate. To sum up, OEC is committed to maintain the highest standards of AML/CFT compliance across all its activities and functions and has a zero tolerance to integrity issues. Compliance works closely with business/operational units to take the business further within the risk appetite of the company and maintains its independence and objectivity in performing its role.

Furthermore, OEC remains alert and vigilant at all times as we cannot be complacent with matters related to AML/CFT compliance.

*Rates are indicative and subjective to change.
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