Countering the Proliferation Financing: Concept and Mitigation Measures

In the segment of Financial Crime, Proliferation Financing is an emerging threat, adversely impacting the security of society and the economy.

The Proliferation of Weapons for Mass Destruction (WMD) covers any support for manufacturing, transporting, acquiring, etc., of any biological, nuclear, or chemical weapons or the associated dual-use goods intended for illegal purposes. Any financial aid about the WMD proliferation – whether by way of raising funds, storing or moving funds, including assistance around the delivery of the WMD-connected dual-use goods would be tantamount to Proliferation Financing.

The UAE AML regulations also cover measures to combat proliferation financing (PF). The regulated entities must assess the PF risk and deploy adequate procedures and controls to mitigate these risks. These measures should include the following:
– implementing the Target Financial Sanctions regime and complying with the sanctions screening requirement
– Inquiring about the customer’s business activities and understanding the end-users of the customer’s products/services
– If required, the regulated entities must also evaluate the customer’s compliance status with TFS requirements (for example, by reviewing the customer’s TFS policies)
– When any PF risk is observed, senior management approval must be sought before establishing a business relationship with such customer

The infographic here elaborates on the concept of the Proliferation of Weapons for Mass Destruction and PF, including the measures required to counter the proliferation financing.

AML UAE is a leading AML Consultancy firm, assisting businesses in developing and maintaining a robust program to identify and prevent financial crime risks, including the framework to manage the proliferation financing risks. With the customized AML/CFT/CPF policies and procedures, let’s effectively combat these risks and safeguard the integrity of the financial systems.