Awatif Mohammad Shoqi Advocates & Legal Consultancy | View firm profile
As part of the
requirement of the Financial Action Task Force (FATF), a Federal Decree No. 20
of 2018 on anti-money laundering and countering the financing of terrorism was
issued on 23 September 2018.
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 23 September 2018 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
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.