Financial Crime World

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UAE Cracks Down on Money Laundering with Stringent Laws and Regulations

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The United Arab Emirates has taken significant steps to combat financial crimes and comply with international standards by establishing a robust anti-money laundering (AML) system. The country’s Central Bank set up an Anti-Money Laundering Department in August 2020 to oversee AML/CFT efforts.

Objectives of the Anti-Money Laundering Department

The department serves three key objectives:

  • Examining licensed financial institutions
  • Ensuring adherence to UAE AML/CFT legal and regulatory frameworks
  • Identifying relevant threats, vulnerabilities, and emerging risks affecting the country’s financial sector

Specialized Courts Established

In November 2020, the Minister of Justice issued ministerial resolutions setting up specialized courts for money laundering crimes within the federal judiciary in Sharjah, Ajman, Umm Al Quwain, and Fujairah. Each court will have:

  • Minor circuits to hear these types of cases
  • Major circuits to handle more complex cases
  • Appeals circuits to review decisions made by lower courts

Additionally, a local anti-money laundering court was established in Abu Dhabi under the leadership of H.H. Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister, Minister of Presidential Affairs, and Chairman of the Abu Dhabi Judicial Department.

Anti-Money Laundering Laws

The UAE’s AML/CFT legal framework is anchored by Federal Decree No. 20 of 2018 on Anti-Money Laundering and Countering the Financing of Terrorism. The law aims to:

  • Combat money-laundering practices
  • Establish a legal framework for authorities
  • Counter the financing of terrorist operations

The decree defines a perpetrator of a money-laundering offence as any person who intentionally commits acts such as:

  • Transferring or transporting proceeds of crime
  • Concealing its illicit origin
  • Acquiring, possessing, or using such proceeds

National Anti-Money Laundering Committee (NAMLCFT)

NAMLCFT was established under the directive of H.H. Sheikh Saif bin Zayed Al Nahyan, Deputy Prime Minister of the UAE and Minister of Interior. The committee’s mandate includes:

  • Combating money laundering and financing of terrorism
  • Representing the UAE in international forums related to AML/CFT

Financial Intelligence Unit (FIU) Launched

The Central Bank’s FIU launched an anti-money laundering platform called “goAML”, developed by the United Nations Office on Drugs and Crime (UNODC). All financial entities and Designated Non-Financial Businesses or Professions must register on this system, which helps:

  • Prevent money laundering
  • Prevent financing of terrorism
  • Detect other illicit financial activities

Fawri Tick: A Smart System to Prevent Financial Crimes

Fawri Tick is a smart system that integrates details of financial crimes with various federal and local authorities concerned. It enables:

  • Swift communication among authorities
  • Decision-making within hours
  • Application of strict control measures to respond effectively to financial crimes

Timeline

July 11, 2024: The article has been updated with the latest information on the UAE’s anti-money laundering efforts.