Financial Crime World

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Whistleblower Protection in Finance: A Developing Area in the United Arab Emirates

The legal framework surrounding whistleblowing and whistleblower protection is evolving in the United Arab Emirates. While there are some federal and emirate-specific mechanisms that offer limited protection, the country still lacks a comprehensive law governing whistleblowing.

Under the UAE Penal Code, individuals have a positive obligation to report criminal conduct. However, this can be challenging for employees who wish to make protected disclosures about their employer. Employees are bound by a statutory duty of confidentiality in their employment contracts, and reporting confidential information to authorities or even the police could lead to legal action against them.

Limited Protection

The UAE Labour Law provides some level of protection for whistleblowers through its provision on unlawful termination. If an employee is terminated due to filing a serious complaint with the Ministry of Human Resources and Emiratisation or bringing a case against their employer that is proven true, they may be eligible for compensation.

Emirates-Specific Protections

  • Dubai: The Financial Crimes Law offers protection against discrimination or mistreatment in the workplace for those who report financial crimes. The law also provides immunity from legal or disciplinary action unless the report is found to be false.
  • DIFC: The Dubai International Financial Centre (DIFC) has implemented a more comprehensive whistleblowing regime, which applies to all persons operating or conducting business within its jurisdiction. Under this regime, individuals making protected disclosures are entitled to protection and may not face legal or contractual liability as a result of their disclosure.
  • ADGM: In Abu Dhabi, the Abu Dhabi Global Market (ADGM) has published guiding principles on whistleblowing, which aim to ensure that whistleblowers are given adequate opportunities to speak up and are fairly treated when doing so. These principles require ADGM entities to establish internal channels for reporting issues and provide protection for whistleblowers who make reports in good faith.

Challenges

Despite these developments, there remain practical challenges to whistleblowing in the region. The cultural and legal implications of making an initial disclosure can be significant, and individuals may face reputational risks associated with reporting wrongdoing to authorities. Additionally, the termination of employment can have far-reaching consequences, including the cancellation of residency visas for sponsored employees.

Recommendations

For employers, it is recommended that they establish adequate procedures for dealing with whistleblowing internally, including confidential reporting channels and whistleblower policies. By creating an open, transparent, and safe working environment, employers can encourage a culture of speaking up without fear of retribution or retaliation.

Key Takeaways

  • The legal framework surrounding whistleblowing in the UAE is evolving but still lacks comprehensive protection.
  • Employees may face challenges in making protected disclosures due to statutory duties of confidentiality.
  • Employers should establish internal procedures for dealing with whistleblowing, including confidential reporting channels and whistleblower policies.