What are the contents that must be included in the MLRO report in UAE ?
The MLRO (Money Laundering Reporting Officer’s Report) is one of the key requirements during AML compliance framework which helps the UAE regulators to ensure that the companies in UAE comply with the anti-money laundering and combatting of financial terrorism requirements. With the help of MLRO document the UAE regulators supervise the companies in order to determine whether they follow the regulations consistently.
The companies are required to submit the MLRO report half-yearly to the senior management and a copy of the same must be forwarded to the supervisory authority, as per the Clause (3) of Article 21 of Cabinet Decision No 10 of 2019. The internal controls and procedures of the companies and their consistency with regards to the compliance with AML-CFT laws must be reviewed by an MLRO or CFT officer before preparing the report. The companies’ commitment towards the application of the rules and regulations must be evaluated by the MLRO and must provide assistance regarding any updates if required, to build a strong compliance framework.
What is the key information that is to be included in MLRO’s report?
The main objective of an MLRO is to point up the drawbacks of a compliance framework and provide adequate instructions to overcome such drawbacks. Below is some information which is to be included in the report:
- By reviewing the SAR (Suspicious Activity Report) and based on its quality the MLRO can assess the requirement of AML- CFT training program for the employees. If the quality of the report is not satisfactory or if there is no such report then the MLRO can include the need for the training for the employees.
- Number of clients who were declined as a result of lack of proper information must be included in MLRO.
- Details regarding the AML-CFT training program provided to employees must be included. Number of training programs provided in a year for existing as well new employees and issues detected along with the certificates of such training which may play the role of evidence as well as the results of the training must be included in the report. The employee’s potential to understand the threats and risks of money laundering must also be included.
- The company’s requirement for any additional resources regarding the AML-CFT compliance framework must be reported.
- Whether the information is up-to-date and its relevance can be ensured by stating the sample review of the customer due diligence file in the report.
- The relevance of AML-CFT compliance procedures and policies, risk assessment as well as the risk rating must be ensured as well as it must be made sure that they are up-to-date.
Internal control elements that must be strictly pointed in an MLRO report:
- Control environment of AML-CFT
- Senior management and board of directors’ supervision with regards to AML-CFT
- Risk assessment related to the business
- CDD (Customer due diligence)and KYC (Know your customer) risk assessment policies along with enhanced customer due diligence
- Current monitoring and suspicious transaction reports
- Keeping of records
Areas where special attention is to be given in the MLRO report
- The conformity regarding the application of AML-CFT procedures must be focused on.
- The confirmation regarding the application of the results of the risk assessment by the company generalized by the competent authority must be focused on.
- The recommendations regarding the improvement of the quality of the procedure and policies must be included in the report which would help the companies to achieve a strong AML-CFT compliance framework. A specific deadline for the implementation of the improvements must be stated and it must be assessed whether the company seriously implements it.
How CDA Makes The AML-CFT Compliance Framework Easy For You?
Under AML-CFT obligation, it is mandatory for all the companies to appoint an MLRO and submit the MLRO’s report to the competent authorities in UAE. The MLRO must never miss out to highlight the deficiencies of the compliance framework and the inadequacy of training to the employees. The companies which are not well aware of the AML compliance framework and face challenges regarding the preparation of a proper MLRO report can approach CDA for receiving assistance from the experts who always ensure that their clients strictly comply with the requirements of AML-CFT laws. For more details contact us.