Money laundering and financing of terrorism are serious criminal acts that threaten the stability, safety & security of businesses and society as a whole. The UAE government enacted anti money laundering laws to stabilize the financial system of individuals, enterprises, and other related parties.
The AML Law made by the Financial Action Task Force (FATF), was implemented to enhance the UAE’s capabilities in detecting and combating financial crimes. In this article, you get to know the latest anti money laundering laws and penalties in UAE.
Federal Laws on Anti Money Laundering & Terrorist Financing
The Anti Money Laundering law in UAE is applicable according to Federal Decretal-Law No. (20) of 2018 on AML, CFT and illegal organizations.
- The act mentions in Clause (1) of Article (2) that any person, knowing that the funds are the proceeds of a felony or a misdemeanor, and who willfully commits any of the following activities, shall be guilty of Money Laundering:
- Conducting any transaction with the intention of concealing or disguising their illegal source, or moving proceeds or transferring them.
- Disguise the true source, location, or nature of the proceeds as well as their disposition, movement, ownership, or rights about these proceeds.
- Acquiring, possessing, or using proceeds upon receipt.
- Helping the perpetrator of the predicate offense to escape punishment.
- Money Laundering is considered an independent crime. The perpetrator’s punishment for the predicate offence will not prevent his punishment for the crime of Money Laundering.
- Proving the illegal source of the revenue should not constitute a prerequisite to sentencing the perpetrator of the predicate offence.
According to Article (3), Federal Law No. (3) of 1987, as referred to in this section, and the Federal Law No. (7) of 2014, as cited here:
- Intentionally commits any of the following crimes of financing terrorism:
- Any of the acts specified in Clause (1) of Article (2) of the present Decree-Law, If the person knows that the proceeds are wholly or partly owned by or intended to finance a terrorist organization, a terrorist person, or terrorism crime, even if there is no intent to conceal or disguise its illicit origin.
- A person who provides, collects, prepares, procures or facilitates the acquisition of Proceeds with the intent to use them, or who knows that such proceeds will be used to commit terrorist offenses, or if he has committed such acts on behalf of a terrorist organization or a terrorist person while aware of their true background or purpose.
An organization must Fight Against Money Laundering in UAE by doing this:
The anti money laundering laws and penalties levied by relevant authorities of UAE assist individuals and businesses to detect financial frauds in their transactions.
- According to Article (32), Financial Institutions should ensure that their foreign branches and majority-owned subsidiaries apply Crime-combating measures that are consistent with the requirements of the Decretal-Law and the present Decision, where the minimum Crime-combating standards of the other country are less stringent than those of the State, to the extent permitted by the other country’s laws and regulations.
- If the other country does not authorize the appropriate implementation of measures for combating the Crime that is compatible with the requirements of the Decretal-Law and the present Decision, then Financial Institutions shall take additional measures to manage AML/CFT risks related to their operations abroad and reduce them appropriately, inform the supervisory authority in the State of the matter and abide by the instructions received from it in this regard.
Penalty Structure Under New AML Law
According to the new Anti money laundering law in UAE (New AML Law, Article 13(1)), the penalty structure has changed for individuals and the punishments are more severe:
- The imprisonment was up to seven years but now up to ten years.
- The Anti Money Laundering Penalties and fines were within a range of AED30,000 to AED300,000 but now the range is AED100,000 to AED500,000.
- In the case of the Whistle-blowing incentive, if multiple perpetrators may be involved in the same AML/CTF offense, the court can exempt an informant from penalties, but the information must lead to the detection of other perpetrators.
Now the anti money laundering penalties in UAE for institutions have been increased considerably under the New AML Law, Article 14. The amount of penalty is within a range of AED300,000 to AED1 million for each offence.
Anti Money Laundering Penalties in UAE
The government is stringent in AML legislation as well as Anti-Money Laundering Penalties in UAE. The Ministry of Economy has released a list of Anti money laundering penalties ranging from AED 50,000 to AED 1 million that can be doubled up to AED 5 million. To make Dubai, Sharjah, Abu Dhabi and other emirates a secure business hub for investors. We discuss here some of those punishments as follows:
- A person who commits a Money Laundering offence, or attempts to commit one, shall be sentenced to a prison term of up to ten years and or a fine of between 100,000 and 500,000 dirhams.
- If an establishment commits money laundering, financing terrorism, or funding unlawful organizations, it is punishable by a fine of AED 300,000 to AED 1,000,000.
- Furthermore, if the representative of a company fails to report a suspicious transaction intentionally or unintentionally shall be punishable by imprisonment and/or a fine ranging in amount between AED 50,000 and AED 300,000. The court will dissolve the company and shut down the offices where the criminal activity took place.
- A person suspected of money laundering shall be punishable by imprisonment for up to one year and / or a fine of between AED 10,000 and AED 100,000.
- The Court may exempt a perpetrator from the imprisonment penalty if he sends a report to the competent authorities before they are aware of the crime, and his actions lead to the arrest of the other perpetrators or the seizure of the laundered funds.
Outsource AML Compliance Services in Dubai:
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