Qualities of a MLRO
Firms are reminded to ensure quality of the Money Laundering Reporting Officers in light of the feedback from the Dubai Financial Services Authority (DFSA) in terms of the profiles of MLRO’s that have been submitted to the regulator:
- Was unable to describe the firm’s business and risk profile in respect of money laundering, terrorist financing, proliferation financing and targeted financial sanctions risk.
- Was unable to outline the core legal and regulatory requirements applicable in the DFSA Rulebook or the related UAE Federal AML Legislation.
- Did not have a sufficient level of seniority and independence within the firm, and was unable to demonstrate satisfactorily they could perform the role on their own authority.
- Had little or no relevant experience and could not provide any reasonable assurance about how they would manage their responsibilities.
- Was unable to demonstrate their competence and capacity to perform the function (e.g., no evidence of appropriate qualification or professional development).
Outsourcing the MLRO role
Where a Firm outsources the role, the Firm must ensure that the outsourced MLRO remains fit and proper for the function.
Over the past 12 months, the DFSA had noted instances where Firms outsource the role of MLRO without carrying out a proper assessment of the candidate’s capability to carry out the role of the MLRO adequately, taking into account the profile of the firm(s) that the applicant will be acting for.
Appointment of a MLRO & Use of Temporary Cover
The MLRO function is a mandatory appointment. There have been a number of occasions where Firms have failed to appoint an MLRO on a timely basis. Where the MLRO function has remained vacant, it has done so in contravention of the DFSA’s Rules.
Firms are reminded that the DFSA’s general expectations for the appointment of MLROs also apply to appointments for other Authorised Individual roles, such as the Compliance Officer role.
