How should a business handle a false positive in sanctions screening in the UAE?
A false positive occurs when screening software flags a customer as a possible sanctions match based on name similarity, but investigation shows there is no genuine connection to the designated person or entity. In the UAE, a business is not required to report a confirmed false positive to the Executive Office and may allow the transaction to proceed. What it must do is document the alert, the checks performed, and the reasoning that led it to clear the match.
To reach that conclusion, the entity should use reliable information such as date of birth, nationality, identification numbers, open-source data, and commercial databases to distinguish the customer from the listed party. Until the match is ruled out, transactions should be suspended. If the review cannot rule out the match, the entity treats it as a potential match, files a Partial Name Match Report, and escalates towards a freeze if it becomes confirmed. Good record-keeping of these decisions is essential for supervisory inspections.
Legal Reference (UAE):
· Cabinet Resolution No. 74 of 2020, Article 21(2) - requires thorough screening of customer and related-party databases against the lists.
· Cabinet Resolution No. 74 of 2020, Article 18 - provides the mechanism for resolving cases involving names similar to designated persons.
For more details, consult the full text of Cabinet Resolution No. 74 of 2020 or seek guidance from your AML compliance officer.