Be Familiar with Anti-Money Laundering Laws & Some Penalties in UAE

Be Familiar with Anti-Money Laundering Laws & Some Penalties in UAE

Money laundering is an issue for the UAE, apart from the means the nation has taken to battle monetary, coordinated, & terrorist criminalities. The UAE keeps a solid Anti-Money Laundering (AML) framework with an end goal to secure against the chance of money laundering & terrorist financing. The UAE has endorsed two laws that fill in as the establishment for the country’s Anti Money Laundering (AML) & counter-terrorist financing (CTF) endeavors. Even though the AML law criminalizes money laundering, it is authoritative Regulation No. 24/2000 that gives rules to how monetary establishments are to screen for money laundering activity. This regulation entails finance companies, cash trade houses, & some other monetary foundations working in the UAE to follow exacting KYC (Know Your Customer) rules. Furthermore, monetary organizations should check the client’s personality and keep up transaction subtleties.

Later, in the context of FATF (Financial Action Task Force) evaluation UAE published the new Federal Decree-Law No. 20 of 2018 on Anti-Money Laundering & Combatting the Financing of Terrorism & Illegal Organizations (the “AML Law”) in October 2018. The new AML Law has presented various ideas which are pointed toward building up the adequacy of the UAE government in distinguishing & ending financial crimes & terror financing.

The New AML Law:

  • In Article 1, the AML Law describes a “predicate offense” as any act comprising a crime or wrongdoing under the applicable laws of the UAE, regardless of whether the act is perpetrated inside or outside of the UAE.
  • In Article 1, the AML Law forces AML/CFT compliance commitments on DNFBPs just as monetary establishments. DNFBP is a “catch-all” abbreviation begat by FATF to cover any business or job that represents an illegal tax avoidance or dread financing hazard however that can’t be named a financial establishment. Similarly, like financial institutions, DNFBPs additionally now are needed to lead risk-based assessments of their business activities and conceivable exposure to monetary violations and to carry out sufficient preventive systems & controls.
    • In Article 1, the AML Law characterizes “funds” vastly & expressly contains in the definition “electronic or digital” assets, exhibiting the UAE’s obligation to handle online money laundering & terror financing including the utilization of cryptocurrency.
    • In Article 1, the AML law presents the ideas of “Controlled Delivery,” which is when specialists permit money laundering to happen, including cross-boundary, and “Undercover Operation,” which is the point at which a non-disclosed law implementation official takes an interest in money laundering, in the two examples to recognize and catch the genuine culprits.
    • In Article 2, the AML Law characterizes a ” perpetrator ” of money laundering & incorporates it as one of the offenses basically “gaining” or “possessing” ” illegal proceeds (Article 2.1(c)). Besides, the AML Law expresses that money laundering offenses are autonomous of the predicate offense. This implies that a conviction of the predicate offense doesn’t block the impeachment of money laundering; nor is a conviction of the predicate offense important to demonstrate the wrongdoing of the cause of continues (Articles 2.2 & 2.3).
    • At Article 9, the AML Law requires the production of an independent Financial Information Unit (an “FIU”), to which dubious action or transaction reports are to be sent, & which is enabled & ready to trade data with practically identical units in different nations (Article 9.2).
    • At Article 14, the AML Law enables the specialists to force keeping announcing commitments on monetary organizations or DNFBPs, which can be anyhow the duty of authoritative punishments, the arrest of corresponding people, & the disqualification of operations or activities.
    • In Article 15, the AML Law requires DNFBPs & financial organizations to plan & document speedily with the FIU detailed suspicious activity or exchange reports upon the recognizable proof of any conceivable motivations to speculate money laundering or terror financing.
    • Also in Article 15, the AML Law presents, without precedent for the UAE, a legitimate & expert privilege exceptional case for the announcing commitment, applicable to attorneys, public accountants, & other lawful experts & independent legal auditors.
      • At Articles 18 and 19, the AML Law requires appeals for international cooperation related to money laundering & terror financing to be prioritized & executed urgently (Article 19.1). Specifically, local authorities are a prerequisite to back with document collection, eye witness interrogation, and arrest of suspects. Furthermore, requests for international cooperation should not be refused if the crime is under investigation and/or prosecution locally as well as internationally or because of confidentiality restrictions on the relevant financial institution/DNFBPs (Article 19.2).
      • Notably, the AML Law incorporates no time bar on the impeachment of money laundering & terror financing.

      Anti-Money Laundering Penalties

      Certain common prominent punishments set down for contradiction of the provisions of the AML Law are as per the following:

      • As per Article 22 of the AML Law, any individual who perpetrates or endeavors to carry out the wrongdoing of Money Laundering as characterized in Article 2(1) of the AML Law will be condemned to imprisonment for a time of not over 10 years or potentially will be dependent upon a fine of between 100,000 & 5,000,000 dirhams.
      • Besides, any individual seen as blamable utilizing the proceeds of terror financing will be condemned to temporary imprisonment or life imprisonment not surpassing a time of ten years & a fine of between 300,000 dirhams & ten million dirhams.
      • Article 23 of the AML Law gives that in occurrences where administrator or agents of organizations saw as culpable of AML offenses may confront heavy fines of between 500,000 & fifty million dirhams, & in occasions where the offense is identified with terrorist financing, the court will make a request for the collapse of the organization & the closure of the offices where the crime occurred.
        • Article 24 gives that the inability to report a suspicious transaction to the FIU, regardless of whether intentionally or by gross neglect, may prompt detainment and additionally a fine of between 100,000 dirhams & 1,000,000 dirhams.
        • Article 25 gives that any individual who cautions an individual or discloses any doubtful transaction under review or inspection will be at risk for detainment for a time of at least 6 months & additionally a punishment of between 100,000 & 500,000 dirhams.

        If you need any help in understanding the anti-money laundering laws & penalties for your smooth running of the business, you are most welcome to ARC Associates, the best business advisory & consulting services in UAE. As we have our anti-money laundering team to ensure whether your business is relevant to all new AML regulations or if not we will take the necessary steps to clear those disparities and to confirm that you are running your business by following all the laws of the UAE. Apart from this, we provide all other business services and especially when it comes to auditing services we become the top auditing companies in Dubai, Abu Dhabi, Sharjah, & UAE that offers clients a solid inclusive financial strategy. So get the integrity you deserve in your business with ARC Associates, we are here to help you at any time!