UAE’s Boosted Efforts to Combat Money Laundering and Terrorism Financing
The UAE has been taking noteworthy actions to combat money laundering and terrorism financing by regulating and applying relevant laws that aim to prevent and detect them.
Among the recent steps is the issuance of Cabinet issued Resolution No. 71 of 2024 on Regulating Violations and Administrative Penalties Imposed on Violators of Measures of Combating Money Laundering and Financing of Terrorism who are Subject to the Supervision of the Ministry of Justice and Ministry of Economy (“Resolution”).
It is worth mentioning that the UAE issued several laws and regulations to combat money laundering and terrorism financing, such as Federal Decree-Law No. 20 of 2018 on Anti-Money Laundering, Combating the Financing of Terrorism and Financing of Illegal Organizations, Cabinet Resolution No. 10 of 2019 on Implementing Regulations of the aforesaid Federal Decree-Law No. 20 of 2018, and Cabinet Resolution No. 16 of 2021 Regarding the Unified List of the Violations and Administrative Fines for the Violations of Measures to Combat Money Laundering and Terrorism Financing that are Subject to the Supervision of the Ministry of Justice and the Ministry of Economy.
The Resolution will apply to the designated nonfinancial businesses and professions if any of the specified violations are committed. The Resolution introduced several new penalties that will be imposed on violators of the regulations applicable in UAE for combating money laundering and financing of terrorism (“Violator”).
It is important to mention that the fine amounts appended to the Resolution range from AED 50,000/- to AED 1,000,000/- depending on the type of violation committed. For example, the fine for failure of the facility to immediately notify the Executive Office for Control and Non- Proliferation of any match with the listed persons or entities, details of the match data, amounts to AED 1,000,000/- However, the amount of the fine imposed on the Violator may be doubled if the violation is repeated.
The Resolution also incorporated some of the sanctions included in Cabinet Resolution No. 74 for 2020 on the UAE List of Terrorists and Implementation of UN Security Council Decisions Relating to Preventing and Countering Financing Terrorism and Leveraging Non-Proliferation of Weapons of Mass Destruction, and the Relevant Resolutions.
The Resolution further provided that the Violator shall be notified of the administrative penalty within 20 working days from the date of its issuance. Anyone with a capacity or an interest may file a grievance against the penalty within thirty (30) working days of being notified of the penalty decision by submitting a reasoned grievance with the supported documents.
According to the Resolution, the administrative penalty may be upheld, replaced, or cancelled after the grievance is reviewed.
This Resolution cancelled Cabinet Resolution No. 16 of 2021 Regarding the Unified List of the Violations and Administrative Fines for the Said Violations of Measures to Combat Money Laundering and Terrorism Financing that are Subject to the Supervision of the Ministry of Justice and the Ministry of Economy and cancelled any provision contrary to or in conflict with the provisions of this Resolution.
This Resolution shall come into force on the day following its publication in the Official Gazette.