Top Measures Adopted by the UAE to Strengthen Anti-Money Laundering Standards

In November 2020, nine companies and nine individuals in the UAE were imposed hefty fines and were sentenced to jail terms in an AED 306 million money laundering case. The culprits transferred funds to multiple fictitious companies to conceal their illegal activities in oil trading. This is not a standalone case as this year saw a number of instances where the UAE government successfully punished the culprits in money-laundering cases. Also in October, the government suspended the licenses of 200 law firms for failing to comply with AML standards.

It’s an indication of how far the UAE has progressed in strengthening its Anti-money Laundering (AML) laws in compliance with global standards. As the UAE has tightened its grip over money-laundering and funding of terrorism, businesses are advised to strengthen KYC procedures. The best AML consultants in Dubai can assist you by providing a detailed guide into the process.

Here is a list of measures that the UAE implemented to strengthen the AML regime:

a) National Committee for Combating Money Laundering

The UAE has established a National Committee for Combating Money Laundering, as per the Article 11 of the Federal Decree-Law Number (20) of 2018 on Anti-Money Laundering (AML) and Combating the Financing of Terrorism. The Committee has enlisted a number of goals to curb the money laundering practice in the UAE such as preparing and developing a national strategy to combat crime and proposing related regulations and procedures in coordination with the competent authorities.

b) Financial Intelligence Units

The UAE Central Bank has authorized the formation of Independent Financial units (FIU) as per Article 9 of the Law, which has been serving as a strong wall in resisting the financial crimes. The FIU analyses suspicious transaction reports, information on all financial institutions and designated non-financial businesses and professions. It has the power to ask financial institutions to submit any information or documentation or reports for consideration.

The FIU has the authority to share information with its counterparts in other countries about the suspicious transactions report. The FIU has recently announced its plans to have a new brand identity and dedicated website to further enhance transparency with its International Counterparts. Accredited AML consultants in Dubai can help the businesses navigate the pressures of the AML regime.

c) Powers of Central Bank of UAE

The governor of the Central Bank of the UAE chairs the National Committee and regulates the monitoring of money laundering crimes in the country. The Central Bank has the power to form independent financial units to investigate financial reports submitted by financial institutions. The Central Bank supervises and examines whether the businesses are complying with the Federal Decree-Law and the AML guidelines issued by the government. If the financial institutions are found to be violating any clauses of the Law, the Bank will impose administrative sanctions on the institutions as per the Law. Consult with the best AML consultants in Dubai to get robust AML advice.

d) Special Court for Money Laundering Crimes

The UAE in November passed a resolution to form a new court to put special focus on money-laundering crimes. The court will be in Abu Dhabi, and special training will be given to judges prosecutors specializing on money-laundering & tax evasion crimes. A special AML court will help accelerate UAE’s efforts to combat crimes related to money laundering.

Following Abu Dhabi’s decision to set up a specialized court for AML in the UAE, the Ministry of Justice issued another resolution to set up such courts in four other emirates as well. Sultan bin Saeed Al Badi Al Dhaheri, Minister of Justice, passed a resolution to set up special AML courts in Sharjah, Ajman, Umm Al Quwain and Fujairah. The courts would come within the framework of the federal judiciary in the courts of these emirates. Each of the courts will be equipped with minor, major and appeals circuits for hearing money-laundering & tax evasion crimes.

e) Stringent Punishment for Money-Laundering Crimes

The UAE’s stance on money-laundering crimes is considered as efficient enough to make the economy more transparent due to the stringent punishment the government has envisioned for the perpetrators of money-laundering crimes. The following are the major punishment as per the Law:

1. Imprisonment of not more than ten years and/or a fine of AED 100,000-AED 5,000,000 for committing any act of money laundering (Article 22)
2. Temporary imprisonment and a fine of AED 300,000 -10,000,000 if a crime is committed via a non-profit organization or an organized group. The same punishment applies if a person abuses power granted to him by his profession to commit a money-laundering crime (Article 22)
3. Minimum of 10 years imprisonment and a penalty of AED 300,000-AED 10,000,000 for utilizing the proceeds for financing terrorist activities (Article 22)
4. A penalty in the range of AED 500,000-AED 50,000,000 on any company whose representatives/managers/agents commit for its account or its name any crimes listed in the act (Article 23)
5. Imprisonment or fine of AED 50,000-AED 5,000,000 on any person violating instructions issued by the competent authority in the UAE (Article 28)

Hire AML Consultants in Dubai to Avoid Punishment

In line with the FATF’s standards on money laundering, the UAE has implemented strong laws and regulations to curb the crime of money-laundering. The formation of a National Committee, Financial Intelligence Units and Specialized courts underscore the UAE government’s efforts to enhance the AML regime in the country. The recent cases involving law firms and several other individuals indicate that these measures are yielding the desired results.

This means the financial institutions and other businesses need to be more diligent in complying with the UAE’s AML. The complexities of the AML regime should not prevent businesses from having a foolproof AML due diligence process within the organization. This is where the best AML consultants in Dubai, such as Jitendra Chartered Accountants (JCA) come handy for the companies. JCA provides AML services in Dubai, UAE such as:

1. Compliance Policy and procedures
2. Assessment of tools and controls design
3. Current AML Policy review
4. AML/ KYC/ CFT Plan and framework
5. AML audit and reporting