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Anti-Money Laundering Law in UAE

Anti-Money Laundering Law in UAE

The United Arab Emirates has released new anti-money laundering (AML) and Combating the Financing of Terrorism (CFT) regulations to increase public awareness of financial crime compliance. The National Anti-Money Laundering and Combatting Financing of Terrorism and Financing of Illegal Organizations Committee (NAMLCFTC) released the guidelines for financial institutions, designated non-financial businesses, and industries in April 2021. The rules are expected to be published on the NAMLCFTC and other regulatory bodies’ websites, as well as raise public awareness of them.

The report also discusses the continued importance of anti-money laundering laws. The Committee on Foreign Affairs, in particular, voted to approve six risk assessment reports linked to terrorist financing, trade-based money laundering, misuse of legal persons and non-profit organizations, lawyers, and the gold sector. The UAE’s government agencies are working together to develop risk management standards in order to enhance the knowledge of different sorts of risks and strengthen communication between regulatory bodies. The initiative is part of an ongoing effort by the UAE to combat financial crime. All financial institutions, non-financial organizations, companies, and professions that fall within the scope of the new legislation will be required to comply with its provisions and executive regulations right away.

The following are the most significant parts of the New Anti-Money Laundering Law No. 20 of 2018:

  • The UAE’s new anti-money laundering legislation was published on September 23, 2018, to standardize money laundering penalties and modify previous laws, especially Law No. 4 of 2002. The new law modified the UAE’s legal framework for crimes covered by Law 7/2017 and Law 8/2017.
  • Money laundering charges may be brought against any individual who, for the purpose of money laundering, intentionally transferred, concealed, or processed any cash from any unlawful activity.
  • The new legislation acknowledged that money laundering is a distinct offense rather than the actual crime from which the laundered funds originate and that even if the primary culprit has been convicted, he may still be sentenced for hiding any money deemed an individual misdemeanor. The same legislation stipulates that the court that investigates a money laundering case is not required to wait until after the main crime has been tried and convicted.
  • The companies might be held criminally liable if the crime was committed in connection with their business or for their sake, according to the law. Even if the company is considered responsible, however, the person who committed criminal acts is responsible for them personally.
  • Article 5 of Law 20/2018 provides the governor of the Central Bank with the right to seize the money for the period of 7 days, and it gives the Prosecution and Criminal Court the right to allocate, follow, evaluate and seize or freeze any amounts of money if such amounts were sourced or linked to any crime.
  • Under the law, the Criminal Court and Prosecution have the power to prohibit the owner from traveling until a criminal inquiry is completed or a crime has been solved. They may also order that the money owner’s funds be frozen in order to prevent him or her from processing any transaction that might lead to concealment or violation of seizure orders
  • If the money owner wants to challenge a seizing order, he or she has the option of doing so before a court. The decision may not be appealed if such a complaint is dismissed. Nonetheless, if the money owner does not have new circumstances or reasons to raise a complaint after three months, he will be able to do so. He still may raise the complaint within three months in the event of new facts or reasons.
  • The court has the power to name a person to manage or sell any equipment that was used in the money laundering before the judgment was given out, in case there was an urgency to get the equipment sold.
  • The amendment established the Prosecution with the power to examine accounting records and documents in the possession of others, as well as access to communication, email correspondence, or computers for tracing money and monitoring accounts.

As per article 18 of Law 20 of 2018, the UAE local judicial authority has a discretionary power (based on request from the courts of any country) to cooperate with other judicial authorities and to provide evidences on investigation and trial processes connected to a crime, which has happened in other countries.

Such authority also has the ability to make decisions based on its own discretion:

  • to seize or freeze the criminal’s assets or a chip;
  • To generate all of the auditing reports maintained in UAE financial institutions
  • To assess those involved, to listen to testimonies from the public, and to collect evidence;
  • as well as to deliver and extradite those involved in the crime.

Even without the treaty, however, these measures may be taken in accordance with the principles of international cooperation that exist between nations. Under the Money Laundering and Terrorist Financing Prevention Act, every request for international cooperation that is related to money laundering must be addressed in a high-priority manner and with due regard for all necessary precautionary measures to safeguard confidentiality. The legislation permits local authorities to accept any foreign court order from a nation that has a treaty with the UAE, provided such a court order is connected with the confiscation of assets or funds linked to money laundering.

Penalties for money laundering in felony and misdemeanor offenses under UAE law

Because the various sorts of offenses may vary, and the information, resources, and assistance of the defendants might be beneficial in crime detection, the penalties for such offenders and their outcomes are determined by the circumstances.

The new legislation lists the potential penalties, which may range from a minimum fine of 5,000 dirhams to a lifetime imprisonment. A judge may reduce a punishment or fine depending on the crime type, but if cooperation by the defendant led to the detection and arrest of additional suspects of the crime or was beneficial in crime investigation, he or she may do so.

Even in the case of death of the defendant, the law allows the court to seize money used in the crime. If a convict is an expatriate, breaking this legislation will result in mandatory deportation after serving punishment. Article 29 of the Law 20 of 2018 states that for felony offenses, deportation is a required option. If the legislation has been violated in minor misdemeanor charges, the court’s discretion will determine whether or not they are deported. As a result, it might be used in conjunction with a jail sentence, or it may be left unapplied at all.

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