Combat money laundering risks — DFSA

48 points recommended for DIFC firms to reduce risks linked with tradebased money laundering

Firms based in Dubai International Finance Centre should focus more on reducing the risks of trade-based money laundering (TBML), a report from the Dubai Finance Services Authority (DFSA) said.

The DFSA Trade Finance Report 2016 indicates that although senior management in some firms is aware of the risks of TBML, they have not created policies to guide lower-level staff, resulting in limited oversight. And in some cases risk owners are not involved or informed of potentially risky transactions conducted by customers.

Ian Johnston, Chief Executive of the DFSA, said, “There is an increased focus globally, on trade-based money laundering risks from international groups such the Financial Action Task Force, and financial service regulators. Our review and the published report are further testament to the DFSA’s commitment to maintaining the highest international standards in the DIFC.

“Given the importance of trade to this region, regulators need to effectively oversee and supervise trade finance without hindering actual trade. We urge firms to benefit from all international guidance issued in that regard.”

In the report, the DFSA notes that although almost all firms conduct anti-money laundering training, this often fails to address trade-based money laundering risks adequately.

In a 48-point list of better practices, it recommends firms do more to raise awareness of money laundering, hire experienced staff, ensure regular training, with a specific emphasis on money-laundering risks, and to establish competency programmes in individual firms’ trade finance activities.