The United Arab Emirates’ Ministry of Economy or MOE developed strategic plans in order to combat practices of money laundering in the country. The government’s initiative involves the setup of a specialized department referred to as the UAE Anti-Money Laundering Department.
This newly created government department will act within the MOE’s structure. Its goal is not only to regulate activities that are listed under business sectors and specific professionals. But also to create awareness.
The Minister of Economy of UAE released a statement saying the said department is targeted in adding further value to progress that’s already made in strengthening the regulatory and legislative framework in confronting money laundering. For the past 3 years, anti-money laundering efforts were led by the UAE Supreme Committee to Combat Money Laundering.
UAE Federal Decree on Money Laundering
The designated non-financial professions and business sectors that re supervised by the authorities with regards to the combat against money laundering and terrorism financing in the country includes various non-financial sectors. Those that are most exposed to risks of contributing to money laundering will be closely monitored.
The sectors and activities which will be strictly regulated for anti-money laundering are said to be prone to misuse of commercial funds and transactions. As per the UAE Federal Decree Law (No 20) of 2018, any entity or individual that knows funds are originating from illegal transactions, wrong doings, or felonies will be committed to money laundering. Money laundering is considered as a serious crime in the UAE. Most especially so if the funds are intentionally transferred or concealed in order to disguise the illegal source or its true nature.
Individuals that are dealing with the movement, ownership, or disposal of the money or the rights that are related to it will be deemed guilty. This includes those who will be in possessions of any proceeds upon receipt, acquisition or aid a perpetrator of an offense.
Sectors of the UAE Anti-Money Laundering Dept.
The new department created to monitor business sectors and activities for money laundering will have different sections. There is a section allocated for policies and risk, investigation and enforcement, and money laundering control.
With the section for policies and risks, it is tasked in identifying and assessing risks for money laundering, the development of policies, controls, and procedures for combatting money laundering, as well as updating and establishing a database. The database will be designated for all non-financial professions and businesses.
The section for control of money laundering will be developing an annual inspection plan with a risk-based approach, field auditing, and inspections of target business industries. The section will also be coordinating with concerned authorities in UAE in order to strengthen control protocols and processes in the country.
Last but not the least, the section for investigation and enforcement, will be undertaking investigation of all violations that were identified. It will also study complaints, verify statistics and databases, which are related to policy violations.
Penalty structure for offenses
The penalty structure for offenses has been changed with punishments becoming more severe.
- For individuals – jail time instead of up to 7 years, has been increased to ten years or fine which used to be Dhs30,000 to Dhs 300,000 now changed to Dhs100,000 to Dhs500,000. The whistleblowing incentive provided includes exemption from penalties that will be imposed on the offenders.
- For institutions – penalties for institutions used to be exactly the same for individuals. The penalties were changed and increased substantially. The fine now is within the range of Dhs300,000 to Dhs1,000,000 for every single offense. Penalty can be fine or forfeiture of the institution.
Compliance and Internal Audit in UAE
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