Anti-Money Laundering System in the United Arab Emirates ⚖️
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Federal Decree-Law No. (20) of 2018 stands as the cornerstone of the United Arab Emirates' legislative framework in combating financial crimes. This law was enacted to bolster the legal structure in alignment with international standards, ensuring the protection of the national economy from illicit activities.
First: Objectives of the Decree-Law The law aims to establish rigorous rules to achieve the following goals:
Combating Crime: Decisively addressing all forms of money laundering practices.
Strengthening the Legal Framework: Unifying efforts between regulatory and security authorities to ensure compliance with global benchmarks.
Combating Terrorism Financing: Cutting off funding sources for suspicious or terrorist organizations to safeguard national security.
Second: Legal Definition of the Perpetrator The law precisely defines the elements of the crime. A person is considered to have committed money laundering if they are aware that the funds are derived from a crime and intentionally commit any of the following acts:
Transferring or moving property with the intent to conceal its illicit origin.
Concealing or disguising the true nature, source, location, or manner of disposal of the property.
Acquiring, possessing, or using such funds upon receipt, knowing their illegal source.
Assisting the perpetrator of the predicate offense to evade punishment.
Third: Independence of the Crime The law stipulates critical legal principles to ensure that criminals do not escape justice:
Independent Offense: Money laundering is considered a separate crime from the "predicate offense" (the original crime that generated the funds, such as human trafficking or drug smuggling).
No Requirement for Prior Conviction: A conviction for the predicate offense is not a prerequisite to prove the material element of money laundering; it is sufficient to prove that the funds originated from an illegal source.
Corporate Criminal Liability: Penalties are not limited to individuals but extend to "legal entities" (companies and institutions) if the crime is committed in their name or for their account. Penalties include heavy fines, confiscation, and potential revocation of licenses.
Fourth: Obligations of Regulatory and Financial Entities The law mandates a suite of preventive measures for financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs), such as real estate agents and precious metal dealers:
Due Diligence: Verifying the identity of clients and understanding the nature of their business (Know Your Customer - KYC).
Reporting Suspicious Transactions: Obligating entities to notify the "Financial Intelligence Unit" (FIU) immediately upon suspecting any financial transaction.
Record Keeping: Maintaining all documents and records for a minimum of five years to facilitate judicial tracking when necessary.
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