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UAE Approves Money-Laundering Law

by lorys Charalambous,, Cyprus

28 December 2001

The United Arab Emirates' Federal National Council (FNC) on Tuesday approved the long-awaited anti-money laundering draft law which will cover banking and financial activities in Dubai. After a long debate, FNC members approved the draft with minor amendments and those were mainly concerned with terms and the language used in the draft.

The meeting, chaired by Speaker Mohammed Khalifa Al Habtour, was attended by Minister of Economy and Commerce Sheikh Fahim bin Sultan Al Qasimi, Minister of State for Financial and Industrial Affairs Dr Mohammed Khalfan bin Kharbash, senior ministry officials and Central Bank executives, including the bank's governor, Sultan bin Nassir Al Suweidi.

The law now goes back to the Cabinet and then onwards after ratification by the Supreme Council to final approval by the President.

The law provides for jail terms of up to seven years and a fine ranging from Dh2,000 to Dh1 million, or both, in addition to freezing of property, depending on the nature of the crime.

The draft Federal Law on Criminalisation of Laundering of Property Derived from Unlawful Activity defines money laundering as any act involving transfer, conversion or deposit of property, or concealment or disguise of their true nature, knowing that such property is derived from any of the offences stated in Article 2:

  • Trafficking in narcotics and psychotropic substances;
  • Kidnapping, piracy and terrorism;
  • Offences committed in violation of the environment law;
  • Illicit dealing in firearms and ammunition;
  • Bribery, embezzlement, and damage to public property;
  • Fraud, breach of trust and related offences;
  • Any other related offences stated in the international conventions to which the State is party.

The term freezing or seizure under the draft law means temporarily prohibiting the transfer, conversion or disposition of, or movement of property, on the basis of an order issued by the competent authority.

The law also stipulates permanent deprivation of property by order of a competent court of those found involved in money laundering offences.

Under the law, a Financial Information Unit will be established at the Central Bank to deal with money laundering and suspicious cases. Reports of suspicious transactions will be sent to the Unit from all financial institutions and other financial, commercial and economic establishments.

The law further stipulates the establishment of an anti-money laundering committee named, The National Anti-Money Laundering Committee which will be chaired by the Central Bank Governor.

The law further stipulates that financial, commercial and economic establishments operating in the country will be criminally liable for the offence of money laundering if it is committed in their names or for their financial account.

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