What are the consequences of failing to conduct an AML risk assessment in the UAE?
Failing to carry out and document a proper risk assessment is a breach of a firm’s core AML obligations and can lead to administrative penalties. Under UAE law a Supervisory Authority may impose a range of sanctions on firms that fail to comply, and it may also require periodic reports on the steps taken to remedy the violation and publish the penalties imposed.
Sanctions can include financial penalties and other supervisory measures, and repeated or serious failings can affect a firm’s standing and licence. Beyond the formal penalty, a firm without a sound risk assessment is effectively operating blind, unable to justify its customer risk ratings or its controls, which increases its exposure to being misused for money laundering.
Legal Reference (UAE):
· Federal Decree-Law No. 10 of 2025, Article 17: the Supervisory Authority may impose administrative penalties on firms that breach their obligations.
· Cabinet Resolution No. 134 of 2025 (Executive Regulations), Article 5: sets the risk assessment obligations that firms must meet.
For more details, consult the full text of Federal Decree-Law No. 10 of 2025 or seek guidance from your AML compliance officer.