Businesses operating in the UAE are legally obliged to comply with Anti-Money Laundering (AML) regulations by ensuring that rigorous and thorough screening is performed on all business and individual parties they do trade with.

The key legislation stipulating that businesses in the UAE take steps against money laundering is the Federal Decree-Law No. 20 of 2018. This law outlines the obligations of businesses to implement preventive measures, conduct due diligence, and report suspicious transactions.

Additionally, the UAE also seeks to align itself with international standards, including recommendations from the Financial Action Task Force (FATF) to ensure that illegal financial activities are curtailed and discouraged in the country.

In alignment with FATF stipulations, businesses in UAE need to perform risk assessments for every business party they do transactions with to highlight any red flags that may violate compliance regulations. These assessments include:

• Verifying the identity of your client by collecting sufficient and relevant information 
• Establish ultimate beneficial ownership (UBO) to ensure no one’s identities are being hidden via shell companies. 
• Perform enhanced due diligence (EDD) so that any party deemed to present a high AML risk is brought under increased scrutiny. 
• Assess the nature of business transactions
• Screen customer transactions on an ongoing basis.
• Keep an eye on sanctions and watchlists.