{"id":100670,"date":"2025-02-13T00:00:00","date_gmt":"2025-02-13T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/dfsa-warns-of-gaps-in-targeted-financial-sanctions-controls-in-ins\/"},"modified":"2025-02-13T00:00:00","modified_gmt":"2025-02-13T00:00:00","slug":"dfsa-warns-of-gaps-in-targeted-financial-sanctions-controls-in-ins","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2025\/02\/13\/dfsa-warns-of-gaps-in-targeted-financial-sanctions-controls-in-ins\/","title":{"rendered":"DFSA warns of gaps in targeted financial sanctions controls in ins."},"content":{"rendered":"

DFSA flags compliance gaps in ins. sector: <\/strong>The Dubai Financial Services Authority (DFSA) identified compliance gaps in targeted financial sanctions (TFS) across its ins. sector in a new Thematic Review (pdf)<\/a>, which assessed all DFSA-regulated firms and ran a more in-depth analysis of 19 firms in 2023. This is despite overall positive findings indicating a strong understanding of sanctions risk, with adequate policies and procedures in place across ins. firms to cover risk. <\/p>\n

One major issue facing ins. firms: High exposure to sanctioned jurisdictions. <\/strong>The review found that while 95% of firms rated their financial crime risk as low, 53% reported dealings with clients in Financial Action Task Force (FATF) grey-listed jurisdictions.<\/span><\/p>\n

Audits in the industry are insufficient, says the DFSA:<\/strong> Despite 98% of firms being registered with the Executive Office for Control and Non-Proliferation (EOCN), the UAE\u2019s sanctions authority, only 28% of firms reported undergoing an audit of their AML policies, procedures, systems, and controls during the assessment period, and 25% had never been audited for their TFS systems and controls. <\/p>\n

Customer risk assessments were flagged as needing improvement<\/strong>, with the DFSA highlighting shortcomings when it came to clarifying the extent of underlying risk when working with entities in FATF grey-listed jurisdictions, as well as a lack of in-depth assessment of other entities\u2019 AML\/CFT compliance. <\/p>\n

Many firms also lacked structured governance<\/strong>, reporting sanctions issues only when exceptions arose rather than through regular tracking and analysis. While AML training was widely implemented \u2014 93% of firms provided annual training \u2014 the DFSA noted many programs lacked UAE-specific sanctions guidance and industry-relevant case studies. <\/p>\n

Measures to be taken: <\/strong>The DFSA has urged firms to strengthen their screening protocols and risk assessments, integrating clearer jurisdictional risk factors and ensuring timely reporting of sanctions-related alerts. It warned that relying solely on contract clauses to cancel agreements with sanctioned clients is a reactive approach\u2014firms must proactively enhance screening processes to mitigate risks upfront.<\/p>\n

Behind the assessment: <\/strong>The DFSA is tightening oversight on ins. firms due to a rise in providers and heightened risk exposure in certain segments. Total premiums reached approximately USD 2.6 mn in 2023, with 11% attributed to marine, aviation, and transport ins. \u2014 sectors that often carry higher risk, particularly in terms of financial sanctions and proliferation financing exposure, DFSA said. Marine ins. (hull and cargo), for instance, presents greater risk factors compared to lower-risk segments such as sickness (37%), fire and other property damage (33%), and liability (14%).<\/p>\n

Clamping down on AML and counter-terrorist financing remains a top priority for the <\/strong>DFSA.<\/strong> The UAE was recently removed<\/a> from FATF\u2019s greylist after being listed in 2022 due to money laundering and terrorism financing concerns. The DFSA took eight enforcement actions<\/a> and levied fines exceeding USD 2.5 mn throughout the year in 2024 as of November, targeting unauthorized financial activities, investor deception, AML non-compliance, and obstruction of investigations.<\/p>\n","protected":false},"excerpt":{"rendered":"

Only 28% of DIFC ins. firms conducted an anti-money laundering audit in 2023, and 25% had never undergone a TFS audit<\/p>\n","protected":false},"author":1,"featured_media":100671,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1638],"tags":[745,794,7,1393,944,1467,807],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-100670","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ins","tag-dubai-financial-services-authority","tag-dubai-international-financial-center","tag-enterpriseam-uae","tag-finance","tag-financial-action-task-force","tag-financial-services","tag-ins","wpautop","entry"],"acf":{"mongo_id":"6ad8fb08-7db8-4844-a2fc-6251a8389e5d","order":"7","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/6\/1654.jpg","photo_position":"above","homepage_title":"","full_issue_title":"DFSA warns of gaps in targeted financial sanctions controls in ins.","related_issue":[100658],"teaser":"Only 28% of DIFC ins. firms conducted an anti-money laundering audit in 2023, and 25% had never undergone a TFS audit","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/2\/.0624f839-c88b-4026-8629-82edfcfd89ef.mp3"},"yoast_head":"\nDFSA warns of gaps in targeted financial sanctions controls in ins. - 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