Financial Crime World

Whistleblower Protection in Finance: UAE Takes Steps to Enhance Transparency and Governance

The United Arab Emirates (UAE) has been placing increasing emphasis on whistleblower protection as a means to promote good corporate governance, enhance market confidence, and boost economic security.

The Need for Whistleblower Protection

While the UAE Penal Code requires individuals to report criminal activity, in practice, this requirement is not rigorously enforced, leaving room for improvement. However, with the introduction of the Financial Crime Law and the DIFC Operating Law, whistleblower protection has taken center stage.

The Financial Crime Law (2016)

The Financial Crime Law provides limited protection for whistleblowers who make disclosures to the Dubai Centre for Economic Security. The law requires that:

  • The disclosure be true
  • Relate to activity affecting economic security
  • Meet certain criteria

While this is a step in the right direction, it remains narrow in scope and has yet to be fully tested.

The DIFC Operating Law (2018)

The DIFC Operating Law takes a more comprehensive approach by providing explicit whistleblower protection for registered entities in the Dubai International Financial Centre (DIFC). The law obliges these entities to:

  • Disclose certain conduct
  • Failure to comply may result in fines
  • Whistleblowers who make good faith disclosures are protected from:
    • Legal or contractual liability
    • Dismissal
    • Victimization

Expert Opinion

Experts believe that while progress has been made, there is still much work to be done to fully protect whistleblowers. “The UAE needs to continue to build on this momentum and extend whistleblower protection to cover a wider range of unethical practices,” said Gordon Barr, an employment lawyer at Al Tamimi & Company.

Conclusion

As the UAE continues to evolve its regulatory landscape, companies are under increasing scrutiny to ensure transparency, particularly in relation to financial dealings. The introduction of the Financial Crime Law and the DIFC Operating Law is a step towards promoting good governance and enhancing market confidence.

For More Information

If you would like more information on whistleblower protection and employment law in the UAE, please contact Gordon Barr or Natalie Jones at Al Tamimi & Company.