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22 February 2024

DFSA alert over Tunisia, Algeria

Picture used for illustrative purposes only. (AGENCY)

By Shuchita Kapur

The DFSA has issued a letter to its members in response to the current political and social unrest in the MENA region, notably Tunisia and Algeria. “Given these recent events, the DFSA wishes to remind Authorised Firms (AFs) and Ancillary Service Providers (ASPs) to be alert to the potential outflow of licit and illicit assets from these jurisdictions,” it says on its website.

“Additionally, if a firm has existing clients from those jurisdictions, then please review the PEP definition to ensure proper classification, along with necessary systems and controls,” it adds further.

Further, the DFSA in its note reminds all AFs and ASPs of the requirements to apply enhanced due diligence to a PEP. “A PEP is defined as an individual who is or has been entrusted with prominent public functions in a country or territory, for example heads of state or of government, senior politicians, senior government, judicial or military officials, senior executives of state owned co-operations, important political party officials but not middle ranking or more junior individuals in these categories.”

The DFSA has also included immediate family members or close associates of a PEP in the definition of a PEP.

The notice further adds that “The Central Bank of the United Arab Emirates’ (CBUAE) Anti-Money Laundering and Suspicious Cases Unit (AMLSCU) has issued an Addendum to Circular 24/2000 requiring enhanced due diligence for foreign PEPs. Furthermore and pursuant to AML Rules 3.7.2 (1) & (2) and ASP Rules 6.9.2. (1) & (2), AFs and ASPs must have systems and controls to determine whether a customer is a PEP and if so, it must have specific requirements to address the risks associated with corruption and PEPs.”

Elaborating on the detailed monitoring and due diligence procedures when a customer relationship is maintained with a PEP, the DFSA highlights some important things that should be followed.

“Analysis of any complex structures such as trusts or multiple jurisdictions; appropriate measures to establish the source of wealth; development of a profile of expected activity for the business relationship in order to provide a basis for the transaction and account monitoring; senior management approval for account opening; and regular oversight of the relationship with a PEP by senior management,” are the things that should be taken into account.

In case of any suspicious money laundering activity, the DFSA lists the actions that can be taken by an AF and ASP. “If an AF or an ASP knows, suspects or has reasonable grounds for knowing or suspecting that a person is engaged in money laundering or terrorist financing then it must without delay make a Suspicious Transaction Report (STR) to the AMLSCU of the CBUAE and also send a copy to the DFSA,” it says.