DNFBPs in the DIFC – Regulatory Aspects

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The Dubai Financial Services Authority (DFSA) plays a pivotal role in safeguarding the integrity of the Dubai International Financial Centre (DIFC) as a global financial hub. A cornerstone of this framework is the Designated Non-Financial Businesses and Professions (DNFBP) Module, which sets out regulatory requirements to combat money laundering (ML) and terrorist financing (TF)..

Who Are DNFBPs in Financial Free Zones?

Designated Non-Financial Businesses and Professions (DNFBPs) include entities and professionals whose services may be vulnerable to misuse for illicit financial activities. Under the DFSA Rulebook, DNFBPs in or from the DIFC include:

• Real estate developers and agents engaged in buying and selling property.
• Dealers in precious metals, stones, or high-value goods with transactions ≥ USD 15,000.
• Law firms, notary firms, accounting, audit, and insolvency firms conducting specific transactions for clients.
• Company service providers offering directorship, registered office, or nominee services.
• Single Family Offices.

These categories align with global standards set by the Financial Action Task Force (FATF), of which the UAE is an active member.

Registration and Regulatory Oversight

Every DNFBP must register with the DFSA through a notification process. Any changes in name, legal status, or address must be promptly reported. Additionally, DNFBPs must notify the DFSA if they plan to cease regulated activities.

The DFSA applies a risk-based approach to supervision. While it works collaboratively with DNFBPs to identify and mitigate risks, it retains strong enforcement powers. These include requesting information, investigating breaches, and imposing fines for non-compliance.

Core Compliance Requirements

1. Policies, Procedures, and Controls
   DNFBPs are required to establish and maintain effective AML/CFT systems. These must enable detection of suspicious transactions, provide a clear audit trail, and ensure compliance with UAE Federal AML laws.
2. Appointment of a Money Laundering Reporting Officer (MLRO)
   Each DNFBP must designate an MLRO of sufficient seniority, equipped with authority, resources, and access to information. The MLRO is responsible for:

• Implementing AML policies and controls.
• Receiving and investigating internal suspicious transaction reports.
• Filing external reports to the UAE’s Anti-Money Laundering Suspicious Cases Unit (AMLSCU) and notifying the DFSA.
• Coordinating with regulators and providing annual AML reports to senior management.

3. Customer Due Diligence (CDD)
   DNFBPs must establish and verify the identity of customers, beneficial owners, and—where relevant—third parties. CDD includes verifying source of funds, assessing risk profiles, and maintaining up-to-date customer records. Enhanced due diligence is required for higher-risk cases, such as Politically Exposed Persons (PEPs) or clients from high-risk jurisdictions.
4. Ongoing Monitoring and Record Keeping
   DNFBPs must continuously monitor transactions to ensure consistency with a customer’s profile. All identification and transaction records must be retained for at least six years, ensuring an audit trail is available for regulators.
5. Suspicious Transaction Reporting
   Employees must escalate suspicions of money laundering or terrorist financing to the MLRO. The MLRO then determines whether to file an external Suspicious Transaction Report (STR). Tipping-off—informing customers of ongoing investigations—is strictly prohibited.
6. Training and Awareness
   AML training must be tailored to the DNFBP’s business activities and delivered to all employees annually. Training ensures staff can identify red flags, understand their reporting obligations, and apply AML procedures effectively.

Special Rules for Single Family Offices

Recognizing their unique structure, Single Family Offices follow specific AML requirements under the DFSA Rulebook. While exempt from some provisions, they must still perform due diligence, designate an MLRO, and report suspicious activities in line with UAE Federal law.

Global Alignment and Local Accountability

The DFSA DNFBP Module is closely aligned with international best practices, particularly FATF’s recommendations for DNFBPs. This ensures DIFC entities remain globally competitive and compliant, while protecting the financial system from being exploited for illicit purposes.

Why Compliance Matters

Non-compliance with AML rules exposes DNFBPs to regulatory sanctions, reputational damage, and even criminal liability. Conversely, robust compliance safeguards business integrity, strengthens client trust, and enhances DIFC’s reputation as a transparent and secure jurisdiction.

Conclusion

The DFSA DNFBP Module is more than a regulatory requirement—it is a strategic framework that empowers businesses to operate responsibly in a globally interconnected financial ecosystem. By embedding AML compliance into their operations, DNFBPs not only meet legal obligations but also contribute to the UAE’s commitment to combatting financial crime.

For DNFBPs, robust compliance is not only a legal necessity but also a strategic advantage — strengthening client trust, protecting reputations, and supporting the UAE’s vision of being a global leader in financial integrity.

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