The UAE has stepped up the fight against money-laundering and financing terrorism by announcing a new law, the federal government stated on Tuesday.
According to the Ministry of Finance, Federal Decree No. (20) of 2018 issued by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, will make it difficult for illegal transfers of cash or valuables out of the country to hide the source or to back activities by terrorist organisations.
In a statement, Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, said the “UAE’s wise leadership is keen to develop the legislative and legal structure of the nation to ensure compliance with international standards on anti-money laundering and countering the financing of terrorism. This decree is a fundamental pillar of anti-money laundering and countering the financing of terrorism, and contributes to raising the effectiveness of the legal and institutional framework of the nation to achieve desired results.”
Shaikh Hamdan said the law will forge a new “legal framework that supports and strengthens the efforts of the relevant authorities in the nation in countering money-laundering and related crimes. The law also counters financing of terrorist operations and suspicious organisations, which enhances the UAE’s commitment to international recommendations and treaties.”
“The UAE has always been a beacon of justice and peace,” Shaikh Hamdan said. “The nation is committed to all international laws and conventions that combat money-laundering and countering financing of terrorism and illegal organisations, both directly and indirectly. This law is part of the country’s strategy to protect the local financial system by applying the best and most efficient systems to fight crimes, which negatively affect the economy and political and financial stability of countries.”
The decree is in line with the requirements and recommendations of the Financial Action Task Force (FATF), an inter-governmental body created to develop international standards to combat money laundering and terrorist financing.
The law will “require the declaration of anyone entering or leaving the country carrying cash, monetary or financial bearer instruments, precious metals or stones of value, as per the regulations set out by the Central Bank,” the ministry said in its statement.
The law “defines a perpetrator of a money-laundering offence as any person who is aware that the money was derived from a felony or misdemeanour, and intentionally commits one of the following acts: transferring or transporting proceeds of crime with intent to conceal or disguise the illicit origin thereof; and/or the concealment or disguise of the true nature, origin, location, way of disposition, movement or rights related to any proceeds or the ownership thereof; and/or the acquisition, possession or use of such proceeds. The law stipulates that money laundering is independent of the predicate crime and that the punishment of the person who has committed a predicate offence shall not protect him or her from being penalised for money-laundering,” the ministry said.
The new law is recommending the formation of an independent “Financial Information Unit” within the Central Bank to receive and investigate all reports submitted by financial institutions and other corporate establishments regarding suspected illicit financial activity.
The finance ministry said the new unit would follow up and gather evidence on the transaction in question, and share this information with the relevant law-enforcement departments domestically and abroad.
The unit will also be responsible for establishing a database, or a special record, of the information and protect it by establishing rules governing information security and confidentiality.
The ministry noted that under the decree, a new committee has been set up under the chairmanship of the Governor of the Central Bank. The “National Committee to Counter Money Laundering, Combating the Financing of Terrorism and Financing of Illegal Organisations”, will propose relevant systems, procedures and policies and assess risks of crime at the national level.
New rules under the law for financial institutions and specific non-financial businesses and professions will require them to “identify, evaluate, document and update crime risks in their area of business, undertake due diligence and determine their scope based on multiple risk aspects while taking into account the results of the national risk assessment.”
“Furthermore they may not open accounts or conduct any financial or commercial transaction, anonymously or by a pseudonym or number, retain or provide any services to them. They must also develop internal policies, controls and procedures to manage, limit, and review the risks identified, and apply them to all their branches and subsidiaries in which they hold a majority stake,” the ministry said.
New money laundering law
■ Federal decree No (20) of 2018 aims to stop illegal transfers of cash, or valuables, out of the UAE.
Who is a money-launderer
A person who is aware that the money was derived from a felony or misdemeanour, and intentionally commits one of the following acts:
• Transferring or transporting proceeds of crime with intent to conceal or disguise the illicit origin
• Concealing or disguising the true nature, origin, location, way of disposition, movement or rights related to any proceeds or the ownership;
• Acquiring, possessing, or using such proceeds.
What the law requires
• Anyone entering or leaving the UAE carrying cash, monetary or nancial bearer instruments, precious metals or precious stones needs to declare it as per regulations set out by the UAE Central Bank.
• The law stipulates that money laundering is independent of the predicate crime (one which another crime rests upon) and that the punishment of the person who has committed a predicate oence shall not protect him/ her from being penalised for money laundering.
Financial Information Unit
The independent unit within the UAE Central Bank will receive and investigate reports submitted by financial institutions and other corporate establishments regarding suspected illicit financial activity.
Responsibilities
• It will follow up and gather evidence on the transaction in question and share this information with law enforcement agencies.
• It can request financial institutions, designated non-financial businesses and professions as well as authorities to provide additional information or documents relating to the reports, information received and any other extra information deemed necessary to perform its functions.
• It may exchange information with its counterparts in other countries based on suspicious transaction reports, or other information that the unit has access to.
• It will establish a database, or a special record, of such information and protect it by establishing rules governing information security and confidentiality.
SOURCE : GULFNEWS