In the past year the United Arab Emirates (UAE) has witnessed a number of important developments in the area of compliance and financial crime which will have a significant impact on the risk exposure of companies operating in the UAE for the foreseeable future. Over time, collectively, these changes will have a profound impact on the compliance environment in the UAE, particularly as it relates to financial crimes, and companies can no longer approach compliance issues casually.

These developments include the adoption of new laws and regulations that are in line with international best practice, a strengthening of the enforcement authority and resources available to regulators to pursue violators and to impose penalties and sanctions, and enhanced cooperation between UAE and foreign law enforcement bodies to protect the integrity of the UAE financial system from money laundering and terrorist financing. Finally, the recent re-imposition of sanctions by the United States (US) against Iran has contributed to a reluctance on the part of most UAE financial institutions to accept any funds from sources in Iran or that are otherwise linked to Iran-related transactions.

Compliance now needs to be on the agenda of boards and management teams, and strategic business decisions – whether they relate to the launch of new products or services, acquisitions and other opportunities to expand into new markets, or the selection of key business partners – will need to be undertaken only after a thorough compliance risk assessment. The best companies will reassess their compliance policies and risk exposure in light of these new developments. All companies would be well advised to make appropriate adjustments and take corrective actions now to ensure they can continue to operate successfully in the new compliance-focused regulatory environment.

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To speak to us in relation to any compliance issues in the UAE, please feel free to contact one of the lawyers below, or your usual Baker McKenzie contact.

Author

Borys Dackiw is the Head of Compliance practice in the Gulf based in the Firm's Abu Dhabi office. A partner of Baker McKenzie since 1995, Borys regularly advises clients across various industries on their compliance and anti-bribery policies and programs and has participated in whistleblower interviews relating to allegations of bribery and other bribery-related investigations. He also advises on mergers & acquisitions (including privatizations), private equity and general corporate and commercial law.

Author

Matthew Shanahan is a partner in Baker McKenzie Habib Al Mulla's UAE Banking & Finance practice, based in Dubai. He has over twenty years of experience of financial services regulators and financial services regulatory regimes in the UK and Middle East. Matthew advises on all aspects of financial services regulation, including fintech, financial markets, anti-money laundering, investigations and data protection, and has full rights of audience in the DIFC Courts.

Author

Mazen Boustany is the UAE Head of the Financial Regulatory, Policy & Legislative Group of Baker McKenzie Habib Al Mulla, based in Dubai. He has over 22 years' experience in banking and finance law in the Middle East, including financial services regulation, Islamic finance, structured finance, securitisation, private equity, financial structuring and restructuring, cross-border transactions and investment funds. Mazen has helped draft many of the financial regulations for the UAE Central Bank and Ministry of Finance.

Author

Andre Abou Aad is a senior associate in the Dubai office of Baker McKenzie Habib Al Mulla. Having practiced in the UAE since 2013, Andre has over 4 years’ experience in financial regulation which he gained practicing on both the regulator’s (legal division of the Dubai Financial Services Authority (DFSA)) and on the market’s side. He advises banks, securities firms, other financial institutions and public-sector bodies on all aspects of financial services regulation, from licensing to regulatory investigations, AML matters and data protection.

Author

Laya Aoun-Hani is a senior associate in the Corporate & Commercial practice of Baker McKenzie Habib Al Mulla, based in Dubai. She specialises in corporate and commercial transactions, including joint ventures, distribution agreements, company structuring and restructuring, mergers and acquisitions, employment and all related matters. Laya also has particular experience in all compliance and VAT matters.

Author

Hazem Hebaishi is an associate in Baker McKenzie's Corporate and Commercial team based in Dubai. He focuses on corporate M&A, restructurings and reorganizations, as well as general corporate and compliance matters.

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