Designated Non-Financial Businesses and Professions

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These entities are regulated in the same manner as credit & financial institutions. Every sector has certain anti-money laundering regulations set with respect to risk exposure of the nature of business. The list of DNFBPs is constantly updated and so, always remains relevant.

All countries must enforce these AML regulatory requirements on Designated Non-Financial Businesses & Professions:

1. Customer Due Diligence should be carried out with respect to the customer, beneficial ownership & business relationship.
2. Identification, assessment, monitoring, management and taking effective action for mitigating ML/TF risks.
3. Maintaining records on CDD information & transactions.
4. Taking extra precautions & measures for Politically Exposed Persons.
5. Implementation of Targeted Financial Sanctions & freezing assets of persons & entities designated by UNSCR 1267 or 1373, and communicating the same to competent authorities.
6. Reporting suspicious activities & transactions to the Financial Intelligence Unit.
7. Application of Enhanced Due Diligence when dealing with entities or customers from high risk & sanctioned countries.
8. Not tipping off clients when an STR is filed with the FIU.

What are the DNFBP regulations mandated by the FATF?

As per the FATF, the jurisdictional authorities need to take steps for the supervision of DNFPBs. These are:

1. Launching successful surveillance systems for Designated Non-Financial Businesses and Professions to comply with AML/CFT requirements. 
2. Implementing ownership criteria & licensing requirements for casinos.
3. Stopping criminals from owning or controlling DNFBPs.
4. Enforcing appropriate penalties for dealing with DNFBP compliance violations. 

Which business activities come under DNFPBs?

Anyone engaged in one or more of the following business activities defined in Article 3 of the Cabinet Decision, Central Bank of the United Arab Emirates: 

1. Dealers in precious metals & stones who carry out single or multiple cash transactions that appear to be over AED 55,000.
2. Real estate agents and brokers concluding operations (purchase and sale of real estate) for the customers’ benefit.
3. Providers of corporate services & trusts that execute a transaction on behalf of their customers by undertaking any of the following activities: 

(a) Giving another person the authority to serve as secretary or director of a firm, as a partner or in the same capacity as a legal person. 

(b) Acting as an agent in creating or establishing legal persons. 

(c) Taking action or giving another person the power to act as a trustee for a direct Trust, or performing a similar function for the benefit of another form of legal arrangement.

(d) Provision of a work address, registered office, residence, correspondence address, or administrative address of a legal arrangement or legal person.

(e) Equipping another individual to act as a nominal shareholder in favour of another individual.

         4. Notaries, lawyers, and other independent legal professionals and accountants,  when preparing, conducting or executing financial transactions for their clients in respect of:

(a) Selling and buying of real estate.

(b) Management of bank accounts, securities accounts, or saving accounts.

(c) Management of funds owned by the client

(d) Setting up funds for establishing, operating or managing companies. 

(e) Setting up, managing, or operating legal arrangements or legal persons. 

(f) Selling and buying of commercial entities.

          5. Other business activities set forth upon a decision of the Minister.

On August 22, 2021, at the directive of His Highness Sheikh Mohammed bin Rashid al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, Dubai Courts announced the establishment of a specialized new court that will focus on combating money laundering.  The announcement comes just months after the UAE Cabinet approved the establishment of the Executive Office of Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT).

These two developments together further demonstrate the UAE’s ongoing efforts to implement and maintain a sophisticated financial crime compliance framework that is in line with FATF’s expectations and recommendations.

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