UAE tightens screws on terror funding
ANOTHER LAW ISSUED TO PROMOTE FDI AND POSITION NATION AS INVESTMENT HUB
The new UAE law against moneylaundering makes it difficult to transfer funds illegally as the country has stepped up efforts against terror financing.
The decree issued by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan will crack down on people using illegal means to transfer cash or valuables out of the UAE to either conceal the source of funds or to fund terrorist organisations.
“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 UAE Central Bank,” said Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance.
The law recommends the creation of a Financial Information Unit, an independent body within the UAE Central Bank, which will receive and investigate reports submitted by financial institutions and other corporate establishments regarding suspected illicit financial activity.
Also yesterday, Shaikh Khalifa issued another law to promote Foreign Direct Investment (FDI), and position the UAE as a major hub for FDI. As per the law, an FDI unit will be established specifically to propose investment policies in the UAE and set up plans to attract foreign investments.
The unit will also oversee the creation of an attractive investment environment, including overseeing the facilitation of procedures needed to register and license FDI projects.
The UAE has stepped up its fight against money-laundering and terror financing by announcing a new law that makes it difficult to transfer funds illegally.
According to a statement issued by the Ministry of Finance yesterday, Federal decree No 20 of 2018 issued by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan will crack down on people using illegal means to transfer cash or valuables out of the UAE to either conceal the source of funds or to fund terrorist organisations.
In the statement, Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, said that the UAE’s leadership is keen to develop a legislative and legal structure in compliance with international standards to counter money laundering and terror financing. “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 the desired results,” he said.
Financial Action Task Force
The decree is in line with the requirements and recommendations of the Financial Action Task Force (FATF), an intergovernmental body created to develop international standards to combat money laundering and terror financing.
Shaikh Hamdan added that the law will forge a “legal framework that supports and strengthens the efforts of relevant authorities in the UAE to counter money-laundering and related crimes. The law also counters financing of terrorist operations and suspicious organisations, which enhances the UAE’s commitment to international and treaties”.
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 UAE Central Bank,” the ministry said in its statement.
The law defines a perpetrator of a money-laundering offence as a person who is aware that the money was derived from a felony or misdemeanour, and intentionally transfers, conceals, or uses such funds (see graphic) .It 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/her from being penalised for money-laundering,” the ministry said.
Financial Information Unit
The law recommends the creation of a Financial Information Unit, an independent body within the UAE Central Bank, which will receive and investigate reports submitted by financial institutions and other corporate establishments regarding suspected illicit financial activity.
The ministry said the new unit will follow up and gather evidence on the transaction in question, and share this information with the relevant lawenforcement 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 central bank governor. 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.
“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.”
Financial institutions
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”.
“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.