UAE: Up to Dh5m fine, life imprisonment for violating money-laundering, terror financing laws

The country has tightened the law as part of the membership of the Financial Action Task Force

by

Waheed Abbas

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Photo: File
Photo: File

Published: Tue 19 Dec 2023, 4:31 PM

Last updated: Tue 19 Dec 2023, 10:48 PM

Companies and individuals must step up their efforts to adhere to UAE’s anti-money laundering and combatting financing of terrorism (AMLCFT) laws in order to avoid penalties and imprisonment, lawyers and officials said.

Alexander Kukuev, manager partner and advocate at Uppercase Legal Advisory, said violators could face up to Dh5 million penalty and lifetime imprisonment while the minimum imprisonment period is 10 years.

The UAE Central Bank and other authorities have penalised many entities for not adhering to AMLCFT regulations. The UAE has tightened the law around AMLCFT as part of the membership of the Financial Action Task Force (FATF), a global financial crime watchdog.

The UAE has stepped up efforts against AMLCFT over the past couple of years and is set to come out of the FATF’s grey list next year as it substantially introduced compliance measures needed for its removal from the multilateral body’s list of countries under enhanced monitoring.

More attention

Uppercase’s managing partner expects more attention will be paid by the government and authorities to complying with the AML from next year in order to comply with FATF rules. The UAE is expected to come out of the FATF’s grey list next year.

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“The UAE will focus more on AML and I strongly believe big firms and SMEs will have to think about it as the number one issue when they start their businesses. More and more free zones are also getting involved, so they will check whether the company registered with them complies with the rules when they renew the licences. If first don’t comply, they may not be given commercial licence,” he said.

Uppercase Legal Advisory is an international legal firm, specialising in providing expertise in key areas such as anti-money-laundering (AML), FATF compliance, combating the financing of terrorism (CFT) compliance, mergers and acquisitions (M&A), and trade law. It recently started its operations in the UAE.

He noted the UAE aligns itself with global efforts in terms of complying with the FATF regulations, AML and combating financing terrorism. “As a matter of fact, the UAE is becoming the leader in the Mena region in terms of taking steps against such practices,” Kukuev told Khaleej Times in an interview on Tuesday.

Challenges for SMEs

He noted that many small and medium enterprises are not aware of AMLCFT laws as they underestimate the importance of such laws.

“Big corporations should pay attention to AML proceedings, KYC and AML and these should be top priority of the companies.”

Abdulla Baqer, regional director of Dubai Chamber, said they not only promote Dubai but also educate foreign companies about the local laws and policies and create awareness among the local companies as well.

"Today, we acknowledge the latest trade boost between Eurasia and the UAE and the positive role of trade law firms in business compliance,” added Baqer.

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