UAE tight­ens screws on ter­ror fund­ing

AN­OTHER LAW IS­SUED TO PRO­MOTE FDI AND PO­SI­TION NA­TION AS IN­VEST­MENT HUB

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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.

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