In 2025, the United Arab Emirates (UAE) Ministry of Economy issued Circular No. MOEC/AML/003/2025, reinforcing the nation’s commitment to mitigating money laundering and the financing of terrorism. The circular mandates that all financial institutions and designated non-financial businesses and professions (DNFBPs) thoroughly screen their customers and transactions against both the United Nations Consolidated List and the UAE Local Terrorist List. The directive highlights the mandate of implementing real-time sanctions screening as a pivotal component of Know Your Customer (KYC) procedures to ensure compliance with international and domestic regulations.
The UAE has long been at the forefront of global efforts to curb financial crimes, including money laundering and the financing of terrorism. As part of its ongoing commitment, the Ministry of Economy’s Circular serves as a key tool in aligning the nation’s financial sector with international best practices and standards. By mandating comprehensive sanctions screening, the UAE aims to safeguard its financial system against misuse by illegal actors and to uphold its reputation as a safe and transparent business hub.
Key Provisions
Mandatory Screening
The circular mandates that all financial institutions and DNFBPs conduct real-time screening of their customers and transactions against both the UNSC Consolidated List and the UAE Local Terrorist List. This screening must take place prior to the establishment of any business relationship and before the execution of any transaction.
Implementation of Real-Time Screening Systems
Institutes are required to implement automated systems capable of real-time screening. These systems must be updated regularly to reflect the most current versions of the sanctions lists and must be capable of identifying both matches – direct and indirect.
Freezing of Funds and Assets
Upon identifying a match, institutions should immediately freeze all funds and assets associated with the listed individual or entity. This action must be taken without ado and without prior notice, in compliance with both UNSC resolutions and UAE Cabinet decisions.
Reporting Obligations
Institutions are coerced to report any confirmed or potential matches to the Financial Intelligence Unit (FIU) through the goAML platform. Reports must explicitly include all relevant information and documentation pertaining to the match and the actions taken thereafter.
Compliance and Enforcement
Registration with the Executive Office
To facilitate compliance, institutions must register with the Executive Office to get automated notifications of updates to the sanctions lists. This registration assures that entities are promptly informed of any alterations and can update their screening systems accordingly.
Internal Controls and Procedures
Institutions are required to establish and maintain strict internal controls and procedures to guarantee compliance with the circular’s provisions. These measures should have staff training, regular audits, and mechanisms for escalating and resolving potential matches.
Penalties for Non-Compliance
Failure to follow the screening requirements outlined in the circular may result in major penalties, including fines and potential imprisonment. The seriousness of the penalties emphasizes the UAE’s commitment to enforcing its anti-money laundering and counter-terrorism financing regulations.
Implications for Financial Institutions and DNFBPs
Operational Adjustments
Institutions will need to invest in and maintain up-to-date screening systems that is capable of handling the real-time requirements as guided by the circular. This may involve upgrading existing infrastructure and assigning resources for continuous system maintenance and updates.
Training and Awareness
The staff must be appropriately trained to understand the significance of sanctions screening and to acknowledge potential matches. Regular training sessions and awareness programs will be important to guarantee that personnel are equipped to handle compliance responsibilities effectively.
Risk Management
Institutions should integrate sanctions screening into their broader risk management frameworks. By doing so, they can presciently identify and combat risks associated with money laundering and terrorism financing activities.
The issuance of Circular No. MOEC/AML/003/2025 marks a detonative step in the UAE’s continuous efforts to curb financial crimes and to align its regulatory practices with international standards. By mandating comprehensive sanctions screening, the Ministry of Economy aims to safeguard the nation’s financial system against misuse by illegal actors and to uphold its reputation as a safe and transparent business hub. Financial institutions and DNFBPs operating within the UAE must take immediate action to comply with the circular’s provisions to ensure adherence to the nation’s legal and regulatory frameworks.
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