anti money laundering

The Federal Decree-Law No. (20) of 2018, on Anti-Money Laundering and combatting the financing of Terrorism and financing of illegal organizations represents a comprehensive legal framework established by the United Arab Emirates (UAE) to combat money laundering, the financing of terrorism, and the funding of illegal organizations. This decree-law is a crucial part of the UAE’s efforts to align with international standards and guidelines to enhance the integrity of its financial system.

Overview:

• The primary aim of the decree-law is to prevent and combat money laundering and the financing of terrorism. It establishes a robust legal framework to address these issues effectively and also intends to ensure awareness among the associated stakeholders.
• This decree law provides clear details for critical terms such as ‘money laundering’, ‘financing of terrorism’, and ‘predicate offense’, ensuring clarity in its application. It also defines the roles of various entities involved, including the Financial Intelligence Unit (FIU), law enforcement authorities, and supervisory authorities. There highlight of other significant terms such as ‘Designated Non Financial Businesses and Professions’, ‘Suspicious Transactions’, ‘Legal Arrangements’ etc.
• There are several Articles which highlights the meaning of persons involved in Money Laundering activities( Article 2), terror financing activities which may be termed as crime, its associated implications and proceeding details( Article 3-Aricle 7)
• The decree-law mandates the establishment of an independent Financial Intelligence Unit (FIU) under the Central Bank of the UAE. The FIU is responsible for receiving, analysing , and disseminating reports of suspicious transactions from financial institutions and designated non-financial businesses.
• The decree law highlights the need for efficient disclosure system( Article 8), robust framework and establishment of a designated body for regular reporting of suspicious activities and transactions( Article 9) and also the need for formulation of a committee and its contribution to combat money laundering activities have been outlined( Article 11-Article 14)
• The Decree Law also ensures to define the roles of diverse authorities and entities involved in the entire process: Various authorities, including the public prosecution, law enforcement, and supervisory bodies, are designated specific roles in the enforcement of the law. The public prosecutor has the exclusive authority to initiate criminal proceedings related to money laundering and terrorism financing.
• The Decree Law highlights the need and significance of timely identification of Suspicious Transactions and their reporting: Financial institutions and designated non-financial businesses are required to report any suspicious transactions to the FIU. This includes providing additional documentation and information as requested by the FIU to facilitate timely analysis.
• The Decree Law promotes the concept of Confidentiality and Protection: The law emphasizes the importance of confidentiality in handling sensitive information. It protects individuals and entities that provide information in good faith from criminal, civil, or administrative liability, unless the disclosure is made with malicious intent.
• The Decree Law provides the details of roles and activities of Law Enforcement Authority: The law grants law enforcement authorities the power to conduct undercover operations, request access to financial records, and implement measures such as travel bans to investigate suspected financial crimes( Articles 16 & 17)
• The Decree Law highlights the procedures and methods regarding the Asset Seizure and Confiscation: The decree-law outlines procedures for the seizure and confiscation of assets linked to money laundering and terrorism financing. It allows for the confiscation of assets even in cases where the accused has died, ensuring that the proceeds of crime can be addressed.
• The Decree Law also highlights the need for concerted efforts of diverse associated stakeholders and the need for efficient Bilateral and International Agreements: The FIU is authorized to exchange information with its counterparts in other countries, fostering international cooperation in combating financial crimes. This exchange is governed by international agreements and bilateral cooperation frameworks.

Overall, the Federal Decree-Law No. (20) of 2018 is a significant legislative measure that enhances the UAE’s capacity to combat financial crimes. By establishing a clear framework for reporting, investigation, and international cooperation, the law aims to protect the integrity of the financial system and ensure compliance with global standards.

The emphasis on confidentiality, the establishment of the FIU, and the defined roles of various authorities reflect a comprehensive approach to tackling the challenges posed by money laundering and terrorism financing.

This decree-law not only strengthens the legal infrastructure but also demonstrates the UAE’s commitment to maintaining a secure and transparent financial environment, aligning with international best practices in the fight against financial crime.