UAE AML Audit

An AML audit is a comprehensive evaluation conducted to ascertain whether a company has implemented an effective anti-money laundering program and is adhering to its AML policy. The primary objective of an AML audit is to periodically review, assess, and enhance a company’s internal controls, policies, and procedures to ensure compliance with AML regulations in the United Arab Emirates.

The presence of an independent AML audit function can provide an impartial and unbiased assessment of a company’s compliance efforts, thereby facilitating the identification and mitigation of potential risks. The audit may be conducted by members of the company’s staff who are independent of any areas that are exposed to potential money laundering risks or by a third-party auditor.

The results of the audit are presented in a report that outlines any deficiencies, gaps, or weaknesses in the organization’s AML compliance policies and procedures and provides recommendations for adherence to UAE AML regulations.

Frequency of conducting AML Audits in UAE

The frequency of conducting an Anti-Money Laundering (AML) audit in the United Arab Emirates (UAE) will vary based on the size and volume of business operations, AML business risk assessment, and regulatory obligations. The following are essential factors to consider when conducting an AML audit:

1. The regulatory requirements stipulated in Article 20 of Cabinet Decision No. (10) of 2019, which pertains to the implementing regulation of Decree-Law No. (20) of 2018, mandates that an independent audit firm in Dubai must be established when deemed appropriate for the type of organization. However, the regulations do not specify a timeframe for conducting anti-money laundering (AML) audits in the United Arab Emirates (UAE).

2. In accordance with best practices, it is generally recommended that independent AML audits be conducted annually, even though there is no prescribed schedule for such audits. This ensures that the company’s AML compliance program is regularly reviewed and updated to address any changes in regulations, policies, procedures, or business activities.

3. Moreover, independent AML audits should be conducted following significant regulatory changes, substantial revisions to the company’s AML policies and procedures, or any other major changes in the business model or activities. This helps to ensure that the company remains compliant with the latest AML requirements.

4. Companies may adopt a risk-based approach and focus on specific targeted areas of their AML compliance program from year to year, particularly those areas that pose a higher level of risk based on the company’s business risk assessment. This allows for a more specific and efficient use of resources.

5. Internal audit services agents should carry out AML audits at a frequency and depth appropriate to the company’s products and services. This means that companies can conduct AML audits internally, but the designated AML compliance officer or anyone on their staff cannot conduct the independent audit.

In essence, although there exists no prescribed timeline for conducting Anti-Money Laundering (AML) audits, it is commonly advised to carry out autonomous AML audits every 12 to 18 months. Nevertheless, enterprises should consider conducting audits annually, subsequent to significant updates, and concentrating on high-risk domains. Furthermore, regulatory obligations may stipulate the frequency of AML audits for specific industries.

Call us now and speak to one of our experienced advisors to have a thorough discussion about AML Audit, be compliant with AML Regulations, and avoid hefty fines.

Flyingcolour Tax Consultant LLC and J N J Auditing LLC are a group of companies with over 19+ experience in the UAE market. Outsource your AML requirements with us and we got you covered.