On Sunday 11th August, 2024, the UAE introduced a new Federal Decree-Law to amend provisions of the existing law on anti-money laundering. To explain the changes and highlight new committees, Lily Eid spoke to Arabian Business to answer a series of questions regarding the UAE's AML Laws.
1) Can you explain the legal implications of the new Federal Decree-Law amending the provisions of the existing law on Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organisations? What are the changes?
The Government of the United Arab Emirates has issued a Federal Decree-Law that amends certain provisions of the existing Federal Decree-Law on Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and the Financing of Illegal Organizations. These amendments are in line with the UAE's ongoing efforts to develop its legislative and legal system, aiming to further strengthen the country's legal framework in support of the authorities' efforts to combat financial crimes. Moreover, the Decree seeks to align the UAE's technical compliance with international recommendations and treaties, while implementing innovative standards to protect the local financial ecosystem.
Key changes introduced by the Decree include:
- Establishment of the National Committee for AML, CFT, and Financing of Illegal Organizations: This newly established body, formed by a Cabinet decision, will play a central role in the UAE's strategy for combating financial crimes. It is responsible for developing and implementing comprehensive AML and CFT strategies, ensuring that all relevant entities in the UAE align with both national and international standards.
- Formation of the Supreme Committee for Oversight: The Decree also establishes the Supreme Committee for the Oversight of the National Strategy for AML and CFT. This Committee, formed by a Cabinet decision, is tasked with studying, overseeing, and assessing the effectiveness of the strategies and measures implemented by the National Committee. It will define measures and requirements for the National Committee and relevant entities, issuing decisions as necessary and ensuring their implementation.
- Creation of a General Secretariat: The Decree stipulates the creation of a General Secretariat to support the operations of the National Committee. The Secretary-General, who heads this Secretariat, will also serve as Vice-Chairperson of the National Committee and as a member of the Supreme Committee, ensuring seamless coordination between operational and strategic levels within the UAE's AML and CFT framework.
- Mandates of the Supreme Committee: The Supreme Committee is empowered to issue decisions and guidelines based on its evaluations, ensuring that AML and CFT strategies are effectively implemented across all relevant entities. Additionally, it oversees the development of the Mutual Evaluation Report, which assesses the UAE's compliance with international standards and monitors the implementation of necessary recommendations.
These changes significantly strengthen the UAE's legal and regulatory framework, enhancing its ability to combat financial crimes while maintaining alignment with international standards.
2) How will the establishment of the National Committee and the Supreme Committee under this Decree affect the coordination between relevant entities in the UAE to combat financial crimes?
The creation of the National Committee and the Supreme Committee under this Decree is set to greatly enhance the coordination among those fighting financial crimes in the UAE. The Decree highlights the importance of collaboration between these committees and other relevant entities, encouraging them to support the National Committee's efforts and responsibilities. By setting clear mandates and providing oversight, these committees will ensure that Financial Institutions (FIs), Designated Non-Financial Businesses and Professions (DNFBPs), and other key players work together seamlessly. They will also improve information sharing, simplify reporting processes, and promote consistent implementation of anti-money laundering (AML) and counter-terrorism financing (CFT) strategies across all sectors.
3) What are the legal responsibilities of the General Secretariat and the Secretary-General introduced by the new Decree?
The new Decree assigns important legal duties to both the General Secretariat and the Secretary-General. The General Secretariat will handle the daily operations of the National Committee, making sure its strategies and policies are effectively put into action across all relevant entities. The Secretary-General acts as a key connector between the National Committee and the Supreme Committee, ensuring that the Supreme Committee's decisions and directives are implemented. Additionally, the General Secretariat is likely responsible for monitoring compliance across all entities, ensuring they meet legal and regulatory standards, and reporting any issues to the relevant authorities. As Vice-Chairperson of the National Committee and a member of the Supreme Committee, the Secretary-General plays a crucial role in fostering close cooperation between these important bodies.
4) How does this Decree contribute to the ongoing development of the UAE's legislative and legal system in relation to combating financial crimes?
This Decree represents a pivotal step in the ongoing development of the UAE's legislative and legal system concerning the fight against financial crimes. By proactively amending its laws to address emerging threats and align with international best practices, the UAE underscores its commitment to maintaining a robust and adaptive legal framework. The establishment of the National and Supreme Committees, along with the introduction of innovative standards, further advances the country's efforts to protect its financial ecosystem and maintain compliance with international standards.
5) From a legal perspective, how will the new Decree help the UAE comply with international standards and facilitate the development of the Mutual Evaluation Report assessing the country's compliance?
The Decree significantly enhances the UAE's legal infrastructure, improving its ability to comply with international AML and CFT standards. By establishing the National and Supreme Committees and refining the legal framework, the UAE is better equipped to develop the Mutual Evaluation Report, which assesses the country's compliance with international standards. The Decree ensures that the necessary recommendations are implemented effectively, thereby reinforcing the UAE's commitment to global financial crime prevention.
6) Is there anything else you would like to add?
The new Decree not only strengthens the effectiveness of the UAE's AML and CFT efforts but also emphasizes transparency and accountability. By formalizing the roles and responsibilities of the National and Supreme Committees and the General Secretariat, the UAE ensures that its approach to combating financial crimes is both comprehensive and legally sound. This Decree could serve as a model for future legal reforms, reinforcing the UAE's leadership in the global fight against financial crimes.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.