The Ruler of Dubai has enacted the Regulatory Law Amendment Law for the Dubai International Financial Centre, Law No 6 of 2018. This amends the Regulatory Law 2004 and will come into force on 29 October. Meanwhile, the regulator has added to its rulebook. A Financial Action Task Force inspection is due next year.

Together with changes to Dubai Financial Services Authority's Anti-Money Laundering Rules, the new law will make some important changes to the regulatory regime in the DIFC, which the DFSA regulates.

The amendments, according to the DFSA, "follow a self-assessment of the DIFC framework in preparation for the upcoming FATF Mutual Evaluation in 2019." The FATF's '40 recommendations' are regarded as the world's AML gold standard.

The changes will update the DFSA’s approach to registering and supervising Designated Non-Financial Businesses or Professions or DNFBPs. This includes a prohibition from conducting any DNFBP activities, in or from the DIFC, without appearing on the DFSA's register. The changes to the supervisory regime will enable the DFSA to suspend or withdraw the registration of a DNFBP, if it is in breach of the law or the DIFC's rules. DNFBPs or 'gatekeepers' who can give money-launderers access to the financial system, i.e. auditors, external accountants, casinos, company service providers, dealers in precious metals and stones, lawyers, notaries, real-estate agents, tax advisors and trusts. Transitional arrangements will apply over a three-month period once the law is in force.

The new law obliges the DFSA to make rules about the criteria that someone must satisfy to be registered as a DNFBP. These are to do with his/its fitness and propriety and the resources that he/it has for complying with the UAE's anti-money-laundering law. The DIFC Registrar of Companies is instructed not to grant a person who is a DNFBP a commercial licence to operate in the DIFC until the DFSA has confirmed to that it intends to register the person as a DNFBP.

The new regulatory rules - as distinct from the new law - will apply immediately to new clients and the DFSA expects that when firms come to review existing clients (as part of "ongoing customer due diligence" or CDD in accordance with rule AML 7.6), they will have to review compliance with the new requirements. The regulator does not believe a formal transitional period to be necessary.

Rule AML 7.3.3(4) now states that if a firm has exhausted all means of identifying the beneficial owner of a body corporate without success, it must treat the senior managers in that body corporate as the beneficial owner. The DFSA, moreover, prohibits the establishment of a business relationship with an entity that has issued bearer shares. It does, however, "consider the risk when dealing with a customer that has issued bearer shares or other similar instruments to be mitigated if the bearer shares have been issued under very strict record keeping procedures to enable the relevant person to identify the current holders at all times."

The recordkeeping period for the DIFC remains six years, despite some pressure from the industry to persuade the regulator to reduce it to the much more normal five. It is also not wavering from its requirement in AML 14.4.1A for a firm to provide it (or a policeman) with copies of records on demand within 24 hours, although it acknowledges that this can be difficult for a branch or part of a group of entities outside the UAE.