The Riffle

The DFSA Thematic Review on TFS Compliance in the DIFC Insurance Sector examines the level of compliance among authorized firms with Targeted Financial Sanctions (TFS) requirements under Cabinet Decision No 74 of 2020and the DFSA AML module. The review highlights key areas for improvement, including risk assessments, policies and procedures, governance, audits, and training. Firms are expected to take proactive measures to enhance their TFS frameworks and ensure full alignment with UAE regulatory obligations.

Key action items:

1. Enhance Risk Assessments:

   • Ensure AML Business Risk Assessments (ABRA) adequately reflect jurisdictional risks, particularly exposure to FATF grey-listed countries.

   • Improve Customer Risk Assessments (CRA) to explicitly consider the insured business lines and jurisdictional risk.

2. Strengthen Policies and Procedures (P&Ps):

   • Ensure all UAE TFS obligations are explicitly referenced, including Cabinet Decision No 50 of 2020.

   • Underwriters should integrate sanctions screening within AML/TFS policies.

3. Improve Screening Obligations:

   • Maintain readily accessible screening records locally.

   • Ensure all names on insurance slips, including related parties, undergo screening.

   • Expand screening to include dual-use goods listed in Cabinet Decision No 50 of 2020.

4. Enhance Governance and Oversight:

   • Senior management must be actively engaged in reviewing TFS compliance.

   • Firms must conduct self-reviews against DFSA findings and report gaps to the regulator.

   • Improve Management Information (MI) reporting beyond exception-based reporting.

5. Ensure Regular Audits:

   • Conduct regular audits covering UAE TFS obligations, as required under AML Rule 9.4.

   • Address gaps where no TFS audits have been conducted.

6. Upgrade Training and Awareness:

   • Ensure TFS-specific training includes UAE requirements and sector-specific red flags.

   • Provide case studies on sanctions evasion to enhance staff awareness.

7. Monitor Compliance and Reporting:

   • Firms must align with Article 21 of Cabinet Decision No 74 of 2020, the DFSA AML module, and EOCN TFS guidelines.

   • Implement quality assurance checks for sanctions screening and compliance procedures.

The DFSA expects firms to incorporate these findings into their systems and controls, ensuring a robust TFS framework within the DIFC insurance sector.

Read our detailed briefing document here: