The Orderly Process of Customer Screening to Ensure AML Compliance

The UAE Anti-Money Laundering (AML) regulations require businesses operating in the UAE to carry out adequate customer due diligence and screen the names of potential and existing customers across the sanctions lists, Politically Exposed Persons (PEP) lists, various other international watchlists, adverse media lists.  Since resources are scarce, the regulated entities must take a risk-based approach and prioritise risks and controls. Here is the infographic providing the orderly process of customer screening.

1. Sanctions Screening

First things first, sanctions violations have the most significant impact in terms of non-compliance and regulatory fines and penalties. The Designated Non-Financial Businesses and Professions (DNFBPs) and Virtual Assets Service Providers (VASPs) first focus on performing the name screening, and if positive matches are found, they must be reported to the UAE FIU goAML portal in the form of a Funds Freeze Report or Partial Name Match Report (PNMR).

2. PEP Screening

Politically Exposed Persons (PEPs) are treated as high-risk customers. After performing the sanctions screening, the regulated entities must rule out the chances of customers being PEPs or associated with PEPs. All PEPs and persons associated with PEPs are treated as high-risk and must undergo the enhanced due diligence requirements.

3. Watchlist Monitoring

The next step in the customer screening process is the monitoring of other relevant watchlists. These watchlists contain information about individuals and entities with criminal histories and related punishments. Some examples of these watchlists include Interpol Red Notices, the FBI’s most wanted list, the State Secretariat for Economic Affairs (SECO) of Switzerland list, the World Bank Debarred Entities List, etc.

4. Adverse Media Screening

Adverse Media Screening is performed to check for any negative news about customers. Press coverage regarding customers’ criminal activities requires due consideration, and regulated entities must take a risk-based approach while onboarding such customers. A simple Google or Bing search would provide much information about the entity or individual being screened.

5. Social Media Screening

The entities and individuals must be screened for negative news or comments on social media platforms. This would help regulated entities to understand the positive or negative sentiment around their customer or prospective customers and take a risk-based approach.