From mandatory declaration at exit and entry point such as the airport for anyone entering or leaving the country to defining the independent offense of money laundering, the new law provides for several measures to combat money-laundering such as the establishment of a Financial Information Unit to investigate suspicious activities, the Central Bank Panel to issue guidelines and implementing orders regarding the combating of money laundering in the country as part of the National Committee to Counter Money Laundering, Combating the Financing of Terrorism and Financing of Illegal Organizations. The new law requires that the financial institutions, businesses and professionals continuously perform diligence in their routine transaction and analyse the risk associated with each transaction, particularly when full disclosures of the account holder is unavailable. All financial institutions, non-financial institutions, businesses and professions who fall under the ambit of the new law shall immediately comply with the requirements of this new law and its executive regulations.
Four Key Points on the New Anti-Money Laundering Law No. 20 of 2018
1. The new law was issued in the UAE on to organize the money laundering fines and amend the previous laws, especially amendment of law no 4 of 2002 of anti-money laundering. The new law changed the UAE regulation regarding the implemented crimes applied by law 7/2017 and 8/2017.
2. According to the new law, the money laundering charges could be placed against any person who intentionally transferred, hided or processed any amounts of money from any illegal activities.
3. The new law considered that the money laundering is a different crime rather than the main crime, which was the source of the laundered money and that even if the criminal has been punished for the main crime, he could still face separate sentence for hiding such money considered as an individual crime.
The same law indicates that the court which investigates the money laundering case does not have to wait or depend on a judgment of the main crime to convict the criminal.
4. The law considers that the companies could be criminally liable if the crime was committed under the name of the company or for its sake. However even if the company could be considered liable, still the individual committed the crime bears personal responsibility for such crime.
Five-Key-Point-Learning on the Criminal Investigations and Seizure under the New Anti-Money Laundering Law
1. Article 5 of Law 20/2018 provides the governor of the Central Bank with the right to seize the money for period of 7 days, and it gives the Prosecution and Criminal Court the right (without informing the owner) to allocate, follow, evaluate and seize or freeze any amounts of money, if such amounts were sourced or linked to any crime.
2. The law empowers the Criminal Court and Prosecution to impose a travel ban on the owner until the end of criminal investigation and the end of a crime. They are also authorized to issue the decision to restrict the money owner from processing any transaction, which could lead to hiding or breaching the seizing order (as far as that does not affect others, acting in good faith).
3. In case the money owner wanted to object the given seizing order, he has the right to raise a grievance before the competent court. If such grievance has been dismissed, the decision cannot be appealed. Nevertheless, the money owner will still have the right to raise the new grievance after 3 months from the initial dismissal, and that is if he did not have the new circumstances to raise the grievance. In the event of new circumstances or reasons, he still may raise the grievance within 3 months.
4. If there is equipment involved in the money laundering, the court has the right to nominate a person to manage or sell such equipment even before the judgment was issued, in case there was an urgency to get the equipment sold.
5. To investigate the money laundering crimes, the law empowered the Prosecution to check the auditing reports and documents in possession of others, and to allow access to communication, email correspondence or computers to trace the money and to monitor the accounts.
International cooperation under the New Anti-Money Laundering Law
As per article 18 of Law 20 of 2018, the UAE local judicial authority has a discretionary power (based on request from the courts of any country, which has a relevant treaty with the UAE) to cooperate with other judicial authorities and to provide evidences on investigation and trial processes connected to a crime, which has happened in other countries.
Such authority has also a discretionary power in deciding:
a) to seize or freeze the assets or a chip used in the crime;
b) to provide all the auditing reports kept in the UAE financial institutes;
c) to inspect involved individuals and buildings, to hear witnesses and to collect evidences;
d) and to deliver and extradite individuals and things used in the crime.
The above could be even done in the absence of the treaty but based on the principals of mutual assistance existing between the countries. The law orders that every request for international cooperation, which is relevant to money laundering, has to be dealt in a high priority manner and with consideration of all the precautionary procedures required to keep the confidentiality of a matter. The law empowers the local authorities in their sole discretion to recognize any foreign court order issued in a country, which has a treaty with the UAE, if such court ordered with regards to seizing assets or money linked with money laundering.
What is the expected punishment for money laundering in felony and misdemeanour crimes under the UAE laws?
As the types of crimes may vary from one to another and the information, resources, assistance of the defendants may be additive in crime detection, the punishments for such crimes and their consequences depend on the circumstances.
The new law stipulates that the punishments could vary between the minimum fine of 5000 dirhams up to a lifetime jail sentence. This depends on the crime type, but a judge using the discretionary power of the court may abridge the sentence or limit the fine considering the cooperation of the defendant, if such cooperation led to catching and arresting other suspects of the crime or was additive in the crime detection.
The law gives the court the right to confiscate the money used in the crime, even in case of death of the defendant. The breach of the anti-money laundering law shall lead to mandatory deportation upon serving the sentence, in case the criminal was an expat. Article 29 of the Law 20 of 2018 stipulates the deportation as mandatory option for the felony crimes. If the law was breached in misdemeanour crimes, applying the deportation will be subject to the court discretionary power. Which means, it could be applied along with jail sentence, without a jail sentence or it could be even left as not applied at all.