AML Implications of Cabinet Decision 109 of 2023

Introduction

The UAE continues to strengthen its Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regime to remain aligned with international best practices and Financial Action Task Force (FATF) standards. A key milestone in this effort was the issuance of Cabinet Decision No. 109 of 2023, which introduced further clarity and obligations for businesses, particularly Designated Non-Financial Businesses and Professions (DNFBPs) and financial institutions.

This decision enhances regulatory oversight, expands reporting requirements, and reinforces the UAE’s commitment to safeguarding its financial system against misuse.

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Purpose of Cabinet Decision No. 109 of 2023

• To update and strengthen the implementation of Federal Decree-Law No. 20 of 2018 and Federal Decree-Law No. 26 of 2021.

• To clarify AML/CTF compliance obligations for both financial institutions and DNFBPs.

• To improve transparency in ownership structures and reporting mechanisms.

• To support the UAE’s position as a trusted global financial hub.

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Key AML Implications of Cabinet Decision No. 109 of 2023

1. Enhanced Customer Due Diligence (CDD)

• Stronger requirements to identify and verify Ultimate Beneficial Owners (UBOs).

• Mandatory Enhanced Due Diligence (EDD) for high-risk customers, including politically exposed persons (PEPs) and clients from high-risk jurisdictions.

• Greater emphasis on ongoing monitoring of client relationships.

2. Increased Reporting Obligations

• Obligations to file Suspicious Transaction Reports (STRs) and Cash Transaction Reports (CTRs) through the goAML portal were reinforced.

• Decision 109 emphasized timely and accurate filing, holding businesses accountable for delayed or incomplete reporting.

3. Focus on High-Risk Sectors

• DNFBPs such as real estate brokers, dealers in precious metals and stones (DPMS), auditors, accountants, and corporate service providers face tighter supervision.

• These sectors are required to implement stricter internal policies and monitoring systems.

4. Strengthened Role of Supervisory Authorities

• The Ministry of Economy (MoE), Central Bank of the UAE (CBUAE), and Securities and Commodities Authority (SCA) were granted greater powers for inspections and enforcement.

• Regulators may impose administrative measures, fines, and even license suspensions for non-compliance.

5. Record-Keeping & Transparency

• Businesses must maintain all customer and transaction records for at least five years.

• UBO disclosures must be accurate, updated regularly, and shared with licensing authorities.

6. Risk-Based Approach (RBA)

• Firms are required to conduct comprehensive risk assessments of their customers, transactions, and operations.

• Compliance programs must be tailored to the level of risk exposure.

7. Expanded Penalties

• The decision reinforced penalties already present under earlier laws.

• Non-compliance may result in fines from AED 50,000 up to AED 5 million, business restrictions, and reputational harm.

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Practical Impact on Businesses

• Higher Compliance Costs: Firms must invest in compliance systems, staff training, and technology.

• Operational Adjustments: STR/CTR filing and UBO transparency require businesses to enhance their internal procedures.

• Reputational Stakes: Businesses risk blacklisting, fines, and client trust erosion if they fail to comply.

• Alignment with Global Standards: Compliance reassures international investors and strengthens the UAE’s attractiveness as a financial hub.

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Conclusion

Cabinet Decision No. 109 of 2023 is a pivotal step in strengthening the UAE’s AML framework. It expands the scope of compliance, tightens supervision on DNFBPs, and enforces greater accountability in reporting and due diligence.

For businesses, the message is clear: AML compliance is no longer optional but a core business requirement. Firms that embed compliance into their operations will not only avoid penalties but also build trust, credibility, and long-term sustainability.

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About Sheikh Anwar Accounting and Auditing LLC

At Sheikh Anwar Accounting and Auditing LLC, we help businesses stay ahead of AML obligations under Cabinet Decision No. 109 of 2023 and related laws. Our services include:

• AML policy development and risk frameworks.

• STR/CTR filing support via goAML.

• UBO compliance assistance.

• Outsourced MLRO and compliance officer services.

• Tailored AML training for employees and executives.

• 📍 Head Office: Dubai, UAE

• 🌐 Website: www.sa-auditors.com

• 📧 Email: info@sa-auditors.com