Financial crimes in the UAE are likely to occur due to the nature and position of the UAE in the business world, therefore increasing the demand for quality financial criminal lawyers. One of the crimes that occurs in the UAE is Money laundering. Money laundering is a serious crime that violates finance laws as well as threatens the security, stability and integrity of the global economic and financial system, and of society as a whole. This is because Money laundering conceals larger, bigger and more serious crimes allowing them to take place. The Anti-Money Laundering (AML) Laws in UAE have been put in place to combat money laundering, terrorist- financing and other threats to the country.
Anti-money laundering laws
Federal Decree No. 20 of 2018 on Anti-Money Laundering and Countering the Financing of Terrorism was issued to help develop the country’s policies and methods to prevent money laundering and financing terrorism. The law plans to:
- combat money-laundering practices
- establish a legal framework that supports the authorities concerned with anti-money laundering and crimes related to money-laundering
- counter the financing of terrorist operations and suspicious organizations.
The Law defines a perpetrator of money-laundering as “any person who is aware that the money was derived from a felony or misdemeanor”, and purposefully commits one of the following acts:
- transferring or transporting proceeds of crime with intent to conceal or disguise its illicit origin
- concealing or disguising the true nature, origin, location, way of disposition, movement or rights related to any proceeds or the ownership thereof
- acquiring, possessing or using such proceeds
- assisting the perpetrator of the predicate offence to escape punishment.
Executive Office of the Anti-Money Laundering
In December of 2020, the UAE Cabinet formed the Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism with the aim to reinforce and regulate Anti-Money Laundering laws. The Office will oversee the collaboration of the UAE and certain companies that share the same aim to limit and prevent Anti-Money Laundering.
National Committee for Combating Money Laundering and the Financing of Terrorism and Illegal Organizations (NAMLCFTC)
The National Committee for Combating Money Laundering and the Financing of Terrorism and Illegal Organizations (NAMLCFTC) oversees the national risk assessment process. The UAE identifies and assesses the money laundering and terror financing risks it faces, in line with its obligations under the Financial Action Task Force Standards.
The committee has the mandate of:
- Preparing and developing a national strategy to combat crime and proposing related regulations, policies and procedures in coordination with the competent authorities, and
monitoring their implementation - Determining and assessing the risks of crime on the national level
- Coordinating with the relevant authorities and referring to related international sources of information in order to identify high-risk countries in relation to money laundering and financing of terrorism. It is also mandated to instruct the supervisory authorities to ensure adherence to the due diligence procedures by financial institutions, designated non-financial businesses and professions, and non-profit organizations which are under their supervision
- Facilitating the exchange of information and coordination among the various bodies represented in the Committee
- Collecting and analyzing statistics and other information provided by the competent authorities to assess the effectiveness of their regulations on combatting money laundering, and the financing of terrorism and illegal organizations
- Representing the UAE in international forums related to anti-money laundering
- Proposing the implementation of regulations covering the work of the Committee and submitting it to the Minister of Finance for approval.
NAMLCFTC was formed by H. H. Sheikh Saif bin Zayed Al Nahyan, Deputy Prime Minister of the UAE and Minister of Interior. The Committee based its legal framework on Federal Law No. 4 of 2002 regarding the Criminalization of Money Laundering in Articles 9 and 10.
In 2021, the Central Bank
of the UAE (CBUAE) published numerous regulations for the banking sector. These cover several key areas of financial regulation, including anti-money laundering (AML). Some of the new anti-money laundering requirements present significant operational challenges. In order to comply, some banks may need to revise their transaction monitoring (TM) systems and compliance organizations. Still, with the right approach, they can design resilient, future-proof compliance target operating models that meet or exceed regulatory expectations. The Anti Money Laundering landscape is seeing rapid change, with the CBUAE actively enforcing its regulations .We should therefore expect the UAE to take further action to address identified topics and comply with the FATF Recommendations.
Recently, the UAE’s anti-money laundering enforcement methods have led to over AED41 million1 in penalties in the first six months of 2022 alone. Numerous establishments in the financial, legal and real estate markets have also been subjected to risk assessments for crimes related to anti-money laundering. More notably , some of the big names arrested in the UAE due to crimes related to money laundering included Atul and Rajesh Gupta who are the most wanted individuals related to the offence. Another name arrested in the UAE is Sanjay Shah who is a suspect in a $1.7 billion tax fraud and money laundering case in Denmark.
In comparison to anti-money laundering regulations in other countries , the UAE’s regulations are similar to regulations in other economically developed countries. For example the UK imposes fines and risk assessments on businesses that are related to money laundering activities. This can be seen below:
“The 2017 Regulations largely apply to the same entities and individuals as the 2007 Regulations, including accountancy services; trust or company services; or related services such as tax advice, audit or insolvency. Dealers in goods who make or receive any cash payment exceeding €10,000 (the threshold was €15,000 in the 2007 Regulations), whether in one transaction or several linked transactions, must also comply. There is an exemption for those engaging in financial activity on an occasional basis if their annual turnover is less than £100,000 (increased from the previous threshold of £64,000) and other criteria are met.”
“The regulations requires a risk assessment of you firm to be conducted and documented, in order to identify money laundering and terrorist financing risks that your firm may face and how you will mitigate against these risks.”
Risk assessments must be proportionate to the size and nature of the firm.”
With the introduction of these new regulations introduced by the UAE government, the crime of Money-Laundering in the country will be reduced and society as a whole will be safer as a result.
