UAE passes law to combat money laundering

The United Arab Emirates has passed a law to combat money laundering and terrorism financing as the country aligns itself with the international rules on combating illicit money flows.

The law recommends the establishment of an independent Financial Information Unit within the Central Bank to receive and investigate all reports submitted by financial institutions and other corporate establishments regarding suspected illicit financial activity.

The unit will also follow up and gather evidence on the transaction in question, and share this information with the relevant law enforcement departments when referring the case for further investigation, a statement said.

“It is a significant step towards comprehensive development of the financial sector in the UAE and reinforcement of Central Bank’s independence and regulatory powers. This will promote effective control over the financial sector in line with international best practices and standards,” said Mubarak Rashed Al Mansouri, Governor of the Central Bank of the UAE.

The new enforcement powers granted will requires setting up of an independent committee, named “Grievances & Appeals Committee,” which will be established under the chairmanship of a court of appeal judge.

The Committee shall have the sole and exclusive jurisdiction to decide on grievances and appeals against any decisions by the central bank related to licensing, authorisation of individuals, and licensing and designation of financial infrastructure systems.

Sheikh Hamdan bin Rashid Al Maktoum, deputy ruler of Dubai and Minister of Finance, said: “The UAE’s wise leadership is keen to develop the legislative and legal structure of the nation to ensure compliance with international standards on anti-money laundering and countering the financing of terrorism.

“This decree is a fundamental pillar of anti-money laundering and countering the financing of terrorism, and contributes to raising the effectiveness of the legal and institutional framework of the nation to achieve desired results.”

Dubai International Financial Centre this month updated its anti-money laundering and counter-terror financing rules, as reported by International Investment.

The UAE has been tightening its financial regulation to try to close regulatory gaps and overcome a perception that it is a hot spot for illicit money flows owing to its raft of free trade zones and geographic proximity to Iran, Reuters reports.

Pedro Gonçalves
Pedro Gonçalves is Financial Correspondent at International Investment.

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