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The United Arab Emirates (UAE) has issued Federal Law No. 20 of 2018 on Anti-Money Laundering (the AML Law), which boosts the UAE’s commitment to international laws and treaties and establishes a legal framework to further combat money laundering and financing of terrorism and other illegal organisations.
The AML Law is in line with the recommendations of the Financial Action Task Force (FATF), the international inter-governmental entity that promotes the integrity of the global financial system, in anticipation of the FATF’s assessment of the UAE that is scheduled to take place in 2019. It also relies on the concept of international cooperation and abides by any decisions and sanctions issued by the United Nations Security Council under Chapter VII of its Charter.
What has changed?
Further to the previous AML Law (as amended in 2014), the new Law has introduced several new concepts required by the FATF, including most notably:
- The inclusion and declaration of virtual and digital currencies, which would address supposed money laundering conducted online involving the use of cryptocurrencies, which is perceived as difficult to trace;
- The introduction of Designated Non-Financial Business and Professions (DFNBPs) in addition to financial institutions, which are required to put in place adequate systems and controls to assess their risk exposure to financial crimes;
- The preparation and submission of Suspicious Activity Reports (SARs) to the Financial Information Unit;
- The concept of Controlled Delivery which is the operation by which the relevant authorities may allow a money laundering operation to proceed in order to further investigate and ultimately apprehend the suspected culprits;
- Undercover or Sting Operations by which a law enforcement official participates in a money laundering operation in an attempt to apprehend the suspected culprits;
- The introduction of a mechanism to appeal the decisions of the Public Prosecutor if deemed guilty of a money laundering offense;
- The definition of a perpetrator of a money laundering offense, which is a first in UAE legislation; and
- The absence of time bar on a money laundering offense.
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