FIU Quarterly Feedback
Report – Q1/2023
July 2023
UAE Financial Intelligence Unit
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CONTENTS
INTRODUCTION.......................................................................................................................................... 3
GLOSSARY .................................................................................................................................................. 3
SNAPSHOT OF Q4 2022: STATISTICAL INFORMATION ............................................................................. 5
Snapshots – STRs, SARs, AIF/AIFTs ........................................................................................................... 5
Snapshots - Disseminated Intelligence Packages and Typologies ........................................................... 6
CASE STUDY: Trade Based Money Laundering ......................................................................................... 7
Case Background ....................................................................................................................................... 7
Case Outcome ............................................................................................................................................ 7
Case Takeaways ......................................................................................................................................... 7
Suggested Actions Based on the Case Takeaways ................................................................................... 8
FEEDBACK: GENERAL MATTERS RELATED TO goAML............................................................................... 8
Keeping Contact Details Updated in goAML............................................................................................. 8
Accuracy of Information ............................................................................................................................ 8
FEEDBACK SPECIFIC TO REGISTERED HAWALA PROVIDERS ..................................................................... 9
Report Quality Issues................................................................................................................................. 9
Case Attachment Issues........................................................................................................................... 10
FIU COMMUNICATION CHANNELS.......................................................................................................... 10
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INTRODUCTION
This document aims to provide feedback on different areas, including the reports submitted by
Reporting Entities (REs) to the FIU during the quarter in scope, highlighting issues noticed and areas of
possible improvement.
The report also acts as a means to share snapshots of the quarter in terms of reporting, quality and
disseminations. The FIU also highlights case studies that include important information and lessons for
all REs that may be used to enhance policies and procedures.
This document is circulated to all Reporting Entities and Supervisory Authorities registered on goAML
quarterly.
GLOSSARY
Terms Description
AIF Additional Information File
AIFT Additional Information File with Transactions
AOD Account Opening Documents
CDD Customer Due Diligence
CSP Company Service Provider
DNFBP Designated Nonfinancial Businesses and Professions
DPMS Dealers in Precious Metals and Stones
EDD Enhanced Due Diligence
FFR Funds Freeze Report
FI Financial Institution
FIU Financial Intelligence Unit
IEMS Integrated Enquiry Management System
Cabinet decision no. (10) of 2019
Law concerning the implementing regulation of decree law no. (20) of 2018 on anti- money laundering and
combating the financing of terrorism and illegal organizations
LEA Law Enforcement Authority
PNMR Partial Name Match Report
PF Proliferation Financing
POS Point of Sale
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RE Reporting Entity
REAR Real Estate Activity Report
RFI Request for Information
RFIT Request for Information with Transactions
RFR Reason for Reporting
RBA Risk Based Approach
SAR Suspicious Activity Report
TFS Targeted Financial Sanctions
UBO Ultimate Beneficial Owner
VASP Virtual Assets Service Provider
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SNAPSHOT OF Q1 2023: STATISTICAL INFORMATION
Snapshots – STRs, SARs, AIF/AIFTs
Reporting Entities continue to submit STRs, SARs and AIF/AIFTs in increasing numbers continuing the
trend seen during 2022 which was a record breaking year in terms of reports received by the UAE FIU.
The total reports received of these three types was 11,902 reports during Q1, 2023. This is compared to
7,742 reports received during the corresponding quarter last year. This is an increase of approximately
54%..
10,000
8,617
9,000
8,000
7,000
5,710
6,000
5,000
4,000
3,000
1,907
2,000 1,068
1,378
964
1,000
-
STR SAR AIF/AIFT
Q1 2022 Q1 2023
This increase in reporting to the UAE FIU highlights the increasing understanding of REs in the different
sectors with regards to their reporting obligations.
Although the increase in total was 54% as stated above, some sectors saw drastic increases in filing as
highlighted in the following table.
% of Increase in STR/SAR reporting
Sector
(Q1 2023 compared to Q1 2022)
Real Estate Agents and Brokers 707%
VASPs 327%
Accountants and Auditors 100%
Company Service providers 92%
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All of these indicators are positive and highlight the fact that reporting is increasing across the various
sectors with some outpacing the general increase by large margins.
The UAE FIU urges all sectors, specifically DNFBPs to continue to build upon the momentum shown to
increase reporting. Furthermore, it is important to understand the reporting requirements under the
UAE AML regime and to engage with the UAE FIU as well as sector supervisors when it comes to outreach
sessions, workshops and similar engagements when they are offered.
This two way engagement will allow REs to better understand not only why reporting is required but
also how good reporting is done; increasing both the quantity and quality of reports being filed.
Snapshots - Disseminated Intelligence Packages and Typologies
During Q1 2023 the UAE FIU disseminated Intelligence Packages to LEAs and other stakeholders that
included 528 STRs, SARs and other report types. The disseminations included intelligence received from
various sectors and were disseminated to various LEAs throughout the UAE.
When it comes to typologies of disseminated intelligence packages during Q1 2023, the UAE FIU’s
disseminations to LEAs and other stakeholders continued to focus on higher risk typologies in line with
the focuses at a national level. The disseminated intelligence packages during Q1 2023 included the
below typologies:
Typologies Percentage
Possible Terrorist Financing 37%
Professional/third party money laundering or networks of third party laundering. 15%
Laundering the proceeds of drugs 13%
The laundering in UAE of proceeds from foreign predicate offences (including direct and
11%
indirect tax crimes)
Fraudulent Transfers (Domestic & International Fraud) 9%
Case involved complex ML methodologies and/or businesses/companies in higher risk
7%
sectors, Cash and PMS smuggling
Trade based money laundering (TBML) 7%
Other Typologies including possible Money Laundering through unlicensed Hawala
2%
Activities
The UAE FIU acknowledges the important role that REs play in the AML process of the country and
encourages all REs to continue to raise high quality reports as they have a direct effect on the intelligence
that is built and disseminated to LEAs. The higher the quality of the information received from REs the
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more efficient will the UAE FIU be in translating the information received into actionable intelligence for
LEAs and Public Prosecutors to build effective criminal cases.
CASE STUDY: Trade Based Money Laundering
Case Background
The UAE FIU received a STR raised by an Exchange House reporting suspicious transactions by its
customer, a general trading company, which is owned by an East Asian national who had been remitting
high volumes to companies in an East Asian country within a short time frame. The Exchange House
deemed this activity to be suspicious and outside of the norm for their customer’s profile.
The entity in question was asked to provide justifications for the high volumes of remittances. In
response, the entity stated that the remittances were trade related and that as part of its normal
business activities it imports construction materials and fishing tackle from a company overseas. Two
streams of trade that do not appear to be related.
The entity provided the exchange house with invoices issued by the overseas company as evidence of
the supposed trade relationship. Also, the entity provided documentary evidence that showed that the
source of the funds was from its account at a local bank. The Exchange house initiated further queries
that the entity did not respond to.
Case Outcome
The case highlighted many concerns and red flags indicating that subject could be involved in Trade
Based Money Laundering and customs duty evasion.
Based on the FIU analysis it was concluded that the entity is suspected to be involved in trade based
money laundering through over-pricing, where discrepancies were noted between the amounts of funds
remitted to companies overseas, prices on invoices, and the actual value of the shipments received as
per customs clearance documents.
The case was disseminated to Law Enforcement and the UAE FIU received feedback that the case has
been escalated to The Public Prosecution for further investigation on suspicions related to TBML.
Case Takeaways
The UAEFIU is highlighting this case as many lessons can be learned. Below are some key takeaways
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from this case:
This case shows the significant impact of filing STRs to The FIU where the reporting entity is
unable to complete EDD procedures and where the customer is uncooperative or irresponsive
and suspicious transactions and/or actions are redflags.
Conducting EDD on High risk business activities is key to detect and manage the risks of TBML.
Especially when business rationale for transactions are vague or non-existent and where
companies seem to be involved with unrelated trade activities.
Suggested Actions Based on the Case Takeaways
Reporting entities are encouraged to review their EDD procedures to make sure that they are able to
identify redflags related to TBML. Entities and individuals that are part of review at the RE level should
be expected to produce real and unaltered documents that prove the existence of trade relationships.
These documents should be reviewed to make sure that they make sense in all aspects including the
amounts listed in contracts, bills of lading, taxation documentation and customs documentation.
FEEDBACK: GENERAL MATTERS RELATED TO goAML
Keeping Contact Details Updated in goAML
Although many REs have been updating the contact details of their staff in goAML, we continue to see
cases where details are either inaccurate or non-existent.
The ability to contact Compliance Officers and their team members is extremely important for the UAE
FIU as cases are built around accurate and swift information. The FIU may need to get in contact with
REs for clarification on an urgent basis.
The inability to reach the correct team members at the REs can impede the case being analyzed and can
end up with either late information or inaccurate information being disseminated to LEAs. All REs are
required to make sure that contact details are updated in goAML at all time.
The same issue was noted in the Q4, 2022 report. It is being reiterated due to its importance.
Accuracy of Information
In the majority of cases that are handled by the FIU REs do show care in presenting data be it as part of
a report or in response to a RFI.
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That said two scenarios regarding accuracy of information from REs have been noted enough times that
they need to be highlighted.
In some instances REs still respond to RFIs in incorrect file formats or using incorrect templates.
This includes responding to RFIs with PDF files of statements when excel format is required or
responding with an excel file that is in a different format than what was asked for by the FIU.
It is very important to note that FIU analysts deal with huge amounts of data from various REs.
Often one case will involve data from various sources. This data is also then shared with LEAs
and PPs in the same formats. It is imperative that REs use the templates that are shared by the
FIU when responding to requests for information.
In some instances REs have shared information, such as account statements, that include errors.
These errors are then identified by the FIU and the RE is contacted whereby the issue is
discovered to be an operational or IT issue at the RE side.
There have been instances of the same set of erroneous data being submitted to the FIU three
times in a row.
There is an expectation by the FIU that REs conduct a quality check on data that is being shared
and that data is correct and accurate.
FEEDBACK SPECIFIC TO REGISTERED HAWALA PROVIDERS
The UAE FIU recently undertook an exercise that aimed at looking into the quality of reports, mainly
STRs and SARs, that are raised by REs from the registered Hawala sector. The findings are provided as
guidance to the sector below:
Report Quality Issues
It was noted that the case summary field in goAML lacks clarity as the registered hawala providers are
following an extremely brief template when writing the case description, in addition to the usage of
unfamiliar abbreviations.
Having an unclear case discerption that includes unfamiliar abbreviations negatively impacts the case
analysis timeline and ends with FIU analysts needed to revert back to the RE multiple times for
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information that should be available at the initial filing of the report.
STRs/SARs that are filed are expected to include a clear case description that summarizes the case being
reported. This should include mentioning the main subject of the case as well as the main suspicions
and main counterparties. Basically the Who, What, When, Where and Why of the case.
Moreover, the use of entity specific appreciations is discouraged. Please use full form in the report filing
so that it is easier for the FIU to process the report.
Case Attachment Issues
The UAE FIU found that some SARs/STRs raised by registered hawala providers lack necessary case
attachments that are extremely important to the processing and analysis of reports. These include
subject passports and IDs as an example.
Moreover, some reports contained blurry documents, possibly from poor scanning of the originals,
making it difficult to view information on the documents such as passport numbers or places or birth.
All REs are asked to make sure that identification documents are attached when filing reports and that
they are legible and all information on the documents are clear before using them in a report filing.
FIU COMMUNICATION CHANNELS
REs must use the following channels of communications depending on the below stated purposes:
S.N. Communication channels Purposes
1
[email protected] For goAML related technical queries such as the use of
systems, user support, troubleshooting, login issues… etc.
2
[email protected] For any subject matter advice on a situation for which a
report is not already filed.
3 Message Board on goAML web portal For the queries related to any report submitted on
goAML* including requests to prioritize a specific report
deemed to be time sensitive or of higher urgency.
4 [email protected] For any queries related to AML/CTF laws, Regulations,
Guidance and Best Practices
*While communicating via goAML Message Board, kindly use the most relevant ‘Message
Type’ and ensure to include the Web Reference Number of the report in the Subject of the
message.
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