The United Arab Emirates has passed a law to combat money laundering and terrorism financing, it said on Tuesday, as it aims to bring its rules into line with international standards on combating illicit money flows.
The law, which is in line with the requirements and recommendations of the Financial Action Task Force (FATF), recommends the establishment of an independent financial information unit within the central bank to receive and investigate reports of illicit financing activity.
"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," said Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance.
The law defines a perpetrator of a money-laundering offense as any person who is aware that the money was derived from a felony or misdemeanor, 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.
FATF is an international organization that sets global standards for fighting illicit finance.
The UAE has been tightening its financial regulation to try to close regulatory gaps. Dubai International Financial Center this month updated its anti-money laundering and counter-terror financing rules.
“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,” Sheikh Hamdan added.
The law, which follows a decree by UAE President Sheikh Khalifa bin Zayed al-Nahyan, will be implemented one month after its publication in the Official Gazette.
The law signals an acceleration in the UAE’s efforts to modernize its financial regulatory environment after it announced on Sunday new legislation governing the central bank and the regulation of financial institutions and activities.
In line with the new law, a committee under the chairmanship of the central bank governor has been set up to identify and assess risks and the effectiveness of efforts to stem money laundering and terror financing among financial institutions. The authorities will also supervise and inspect financial institutions, other businesses and non-profit organizations to check on their compliance levels.
The law repeals legislation from 2002 on combating money laundering and terror financing.
