In its continuous effort to combat the Money Laundering and Financing of Terrorism crimes in the UAE, the Government has come up with Cabinet Decision No. 58 of 2020 on the Regulation Procedure of the Real Beneficiary. The Cabinet Resolution introduced a new requirement for legal persons in the UAE to disclose their beneficial owners.
Pursuant to the Cabinet Decision No. 58 of 2020, the Actual beneficiary has been defined as the natural owner who has the ultimate ownership or exercise control or any other indirect means, and also the natural person the transactions are conducted on his behalf or that exercise ultimate actual control of the legal person.
By this Cabinet Decision, all legal persons in the UAE except those in the financial free zones (Abu Dhabi Global Markets and Dubai International Financial Centers) and entities that are directly or indirectly wholly owned by the Federal or Emirate Government are required to keep an Ultimate beneficiary owner data.
We shall be considering the provisions of Article 8 which provide for Register of Beneficial Owner and administrative sanctions imposed on its violators under the provisions of Article 7 of the Cabinet Decision No. 53 of the year 2021)
Register of Beneficial Owner under the UAE Anti-Money Laundering
All legal persons in the UAE pursuant to Article 8 are required to maintain the data of each of their Beneficial Owners in a Register of Beneficial Owners to be established within (60) days from the date of the enactment of the Decision or the date which the legal person comes into existence. If there are changes to such data by the legal person, they are required to update and record such changes in the Register of Beneficial Owner within fifteen days (15) of becoming aware of such changes.
Content of Register of Beneficial Owner under the UAE AML
The information to be registered in respect of each Beneficial Owner shall include:
- Full name, nationality, date, and place of birth
- Residential address or address to which notices can be sent to the Beneficial Owner
- The number of passports or identity cards, the country of issuance, date of issuance, and expiry
- Basis and date on which the person became a Beneficial Owner of the Legal persons
- The date on which the person ceased to be a Beneficial Owner of the Legal Person
The Law also stipulates that any data registered if the Beneficial Owner is a natural must be provided by and within the knowledge of the natural person. Any information not provided by the natural person, but registered by the entity for the natural person must be communicated to the natural person within (15) fifteen days of entering such information in the register.
Objectives of Register Beneficial Owner under the UAE Anti Money Laundering
The objective of this law is to ensure there is complete disclosure and transparency by entities. This will help to prevent money laundering and the financing of terrorism in the country towards the UAE government’s obligations to relevant international organizations, such as the Financial Action Task Force (FATF). Thus, the Government has further promulgated sanctions on violators of these laws.
Sanctions against violators of the Rules on Register Beneficial Owner
The Cabinet Decision provides for Administrative Sanctions in cases of contravention by any legal person. These sanctions are contained in Cabinet Decision No. (53) of the year 2021 containing the Administrative Penalties meted out for violating the Provisions of the Cabinet Decision No. (58) of the year 2020 regarding the regulation of the Actual Beneficial procedures.
The Minister or any Licensing Authority delegated by the Minister may impose one or more of the sanctions and may also sign the administrative penalties imposed on the violators of the laws as contained in the Cabinet Decision of No 58 of 2020.
The provisions of the Cabinet Decision No. 53 of the year 2021 shall apply to the legal persons licensed or registered in the UAE including the non-financial free zones which are in breach of the Cabinet Decision No. 58 of 2020 regarding the regulations of the actual beneficiary.
The first violation of the provision attracts a written notice to comply, if the legal person contravenes the second time, there shall be a fine of AED 50,000 and the legal person shall be notified to rectify his position within (30) days from the date the penalty was issued. For the third violation by the same legal person, the law imposes a more stringent fine of AED 100,000 and suspension of the commercial license for no less than (12) months.
Deadline for submission of the Registers of Beneficial Owner
The deadline for submission of ultimate beneficial owner data is June 30th day of June 2021.
From the above, it is clear that the UAE Government has zero tolerance for Money Laundering and financing terrorism crimes and would stop at nothing to ensure strict compliance with any of the laws promulgated in this regard.
Have you complied with the provisions of the law on Ultimate Beneficial Owner, call us here at Farahat and Co. now for assistance
Find the below references.
- Cabinet Decision of No. 58 of 2020
- Cabinet Decision of No. 58 of 2020
- Article 8(3) of the Cabinet Decision of No. 58 of 2020
- Article of the Cabinet Decision of 2021
- Article 3 of the Cabinet Decision of 2021
- Article 2 of the Cabinet Decision of No 53 of 2021