UAE’s FNC Passes Anti-Money Laundering Act

The UAE Federal National Council (FNC) has passed legislation to punish money laundering and terrorism financing in the country, state news agency WAM reported.

Under the law, individuals found guilty of money laundering will face a jail term of ten years along with a fine ranging from Dhs100,000 to Dhs500,000.

An institution found guilty of flouting the law will be fined between Dhs50,000 and Dhs500,000.

The law defines the offence of money laundering as when a person converts, transfers or deposits money with an intent to conceal its illicit origin and when they disguise the source of funds being transferred or deposited.

“The acquisition, possession or use of such proceeds” will also be considered an offence, the FNC said.

The anti-money laundering act also mandates that all inbound travellers should declare “the amount of money, convertible financial instruments, or precious metals and gems they hold under the disclosure regulation to be issued by the UAE Central Bank.”

Terror financing is described as providing, collecting, carrying or transferring money directly or indirectly to anyone with the intention of using it for terrorist acts, the FNC said.

The law also outlines the scope of duties of the Anti-Money Laundering and Suspicious Cases Unit and Financial Information Unit (AMLSCU) at the Central Bank.

As per the law, all banks, moneychangers and other financial institutions have a personal obligation to report any unusual transactions to the AMLSCU.

A recent KPMG survey about anti-money laundering emphasised the importance of implementing tougher measures against financial crimes in the Middle East.

Although Middle Eastern countries have been increasingly focused on improving anti-money laundering legislation, the survey said that the region still faces some “significant challenges around compliance, especially with regard to customer due diligence, transaction monitoring, and Politically Exposed Persons (PEPs) identification.”

Moreover unrest in the region poses a challenge in screening financial crimes, KPMG noted.