Money laundering is a major global challenge with extensive economic, social, and political implications. Money Laundering involves disguising the origins of illegally acquired funds, enabling criminals to profit from their activities while simultaneously eroding the integrity of legitimate economic systems.
This article will explore how these new changes can impact employers and employees.
Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT)
The primary legislation governing AML and CFT in the UAE is Federal Decree-Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations (AML Law). This law was later amended by Federal Decree Law No. 26 of 2021.
In addition, Cabinet Decision No. 10 of 2019 has been issued to provide the implementing regulations for this Decree-Law.
The AML Law aims to:
– combat money-laundering practices
– establish a legal framework that supports the authorities concerned with anti-money laundering and crimes related to money-laundering
– counter the financing of terrorist operations and suspicious organisations.
Counter-Proliferation Financing
Proliferation financing involves raising, moving, or making available funds or other assets for the purposes of weapons of mass destruction (WMD) proliferation. UAE’s framework governing proliferation financing is covered by a number of guidance notes.
National Strategy on AML, CFT and CPF
The UAE Cabinet has recently approved a National Strategy for Anti-Money Laundering, Countering the Financing of Terrorism and Proliferation Financing for 2024-27. This strategy outlines the legislative and regulatory reforms the UAE is taking to prevent the impact of illegal activities on society.
The national strategy focuses on the key pillars of risk-based compliance, effectiveness, and sustainability. These include:
(i) Enhancing national and international coordination to improve information exchange and partnerships;
(ii) Ensuring effective supervision of AML, CFT, and CFP obligations within the private sector;
(iii) Strengthening the detection, investigation, and disruption of illicit financial activities;
(iv) Optimizing human and technical resources, improving data collection and analysis, and focusing on the risks posed by virtual assets and rapidly advancing forms of cybercrime;
(v) Enhancing international cooperation and strategic partnerships;
(vi) Strengthening oversight of financial institutions and designated non-financial businesses and professions;
(vii) Improving transparency of beneficial ownership information;
(viii) Optimizing the use of financial data for effective investigations and asset recovery;
(ix) Maintaining robust frameworks to combat terrorism financing and the financing of illicit organizations;
(x) Updating legal and regulatory frameworks to align with global standards;
(xi) Fostering coordination and collaboration between the public and private sectors;
(xii) Developing centralized data systems for monitoring and ensuring adequate resources and training for various entities.
Recent Amendments in AML Law
As part of the National Strategy, the UAE Government has recently issued a New Decree Law amending some provisions of the AML Law. The recent amendments aim to strengthen further the legal framework that assists the UAE’s authorities in fighting against various forms of financial crime, thereby protecting the integrity and stability of the financial system.
Disclaimer
This publication does not provide any legal advice and it is for information purposes only. You should not rely upon the material or information in this publication as a basis for making any business, legal or other decisions. Therefore, any reliance on such material is strictly at your own risk.
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Sameer A. Khan
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