A guide on mistakes to avoid in AML compliance for VASPs in UAE | AMLUAE

Hello AML UAE Viewers!

Today, the video discovers the AML compliance mistakes made by Virtual Asset Service Providers (VASPs). Avoiding these mistakes shall enable VASPs to comply with AML regulations effectively.

But first, let’s understand why VASP face money laundering threats.

What makes VASPs vulnerable to Money Laundering

The characteristics of the virtual assets ecosystem that make the VASPs vulnerable to money laundering threats are:

• Decentralization of virtual asset transactions.
• Element of anonymity or pseudo-anonymity while dealing with virtual assets facilitates criminals to disguise their true identities and actual nature of transactions.
• Facilitation of high-value and high-frequency transactions.
• Ease of quick transfer of virtual assets from one person to another across the globe.
• Evolving nature of Regulatory frameworks for virtual assets and VASPs.

AML compliance measures for VASPs

To fight these threats, VASPs must implement an AML compliance program in their business. Such an AML program needs to include the main components of:

• Creating AML framework, including policies, procedures, and controls.
• Applying appropriate customer due diligence (CDD) measures, including Know Your Customer (KYC), Sanctions Screening and customer risk profiling
• Applying adequate Know Your Transaction (KYT) measures
• Training employees on AML and CFT compliance measures and individual roles and responsibilities.
• Complying with Financial Action Task Force (FATF) travel rule requirements.
• Maintaining adequate records and information for prescribed duration.
• Monitoring customers and transactions during the business lifecycle.
• Reporting of suspicious activities and transactions (SAR/STR) to the UAE’s Financial Intelligence Unit (FIU) through the goAML portal.

Mistakes to avoid in AML compliance for VASPs

But while creating and implementing these measures of AML compliance program, VASPs must be mindful of avoiding the most common mistakes that generally VASPs make while ensuring AML compliance such as:

1. Inability to manage changes per AML regulatory updates.
2. Difficulty in keeping pace with technological innovations and developments.
3. Failure to assess risks to their business.
4. The absence of a well-defined, customized AML framework.
5. No focus on customer identification or inadequacy of the CDD and KYC measures applied
6. No plan in place to comply with Know Your Counterparty VASPs.
7. Lack of AML training for employees .
8. Inability to find the right balance between user privacy and AML compliance requirements.
9. Insufficient and incomplete records and reports.
These mistakes need to be avoided to ensure that AML compliance measures remain effective.

For more such insightful videos on VA’ s, VASP requirements and AML Compliance pertaining to VASPs stay tuned to AMLUAE!

Thank you!

Timestamps:

0:00 Introduction
0:20 What makes VASPs vulnerable to Money Laundering
0:56 AML compliance measures for VASPs
1:56 Mistakes to avoid in AML compliance for VASPs
2:52 Summary

#AMLUAE #VASPs #KYC #CDD #amlcompliance #FATF #SAR #STR #goAML #sanctionscreening