The UAE has made significant improvements in combating financial crimes with the introduction of a new Federal Decree-Law, bringing vital updates to its Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and illegal organization financing frameworks. These changes underscore the UAE's ongoing commitment to strengthening its legal and regulatory systems as global threats evolve. The decree not only strengthens the country's legal defences but also aligns them with international standards, reinforcing the UAE's position as a leader in combating financial crime on the global stage.
A key feature of the law is the establishment of the National Committee for AML, CFT, and Financing of Illegal Organizations (NAMLCFTC). Formed by Cabinet decision, this body will lead the UAE's strategies against financial crimes and ensure they meet both national and global standards. By centralizing efforts under this Committee, the UAE aims to enhance coordination and effectiveness in addressing financial crimes, thereby elevating compliance, and enforcement across the nation.
The NAMLCFTC, which derives its framework from Federal Law No. 4 of 2002, has several key responsibilities:
- Developing and implementing a national strategy to combat financial crimes and proposing related regulations.
- Coordinating with relevant authorities and utilizing international sources to identify high-risk countries and ensure adherence to customer due diligence (CDD).
- Facilitating information exchange among various bodies.
- Collecting and analysing statistics to evaluate the effectiveness of AML/CFT regulations.
- Representing the UAE in international forums on money laundering.
Although the NAMLCFTC was previously established, its powers and roles have been significantly enhanced.
Complementing this effort is the creation of the Supreme Committee for the Oversight of the National Strategy for AML and CFT. Also established by Cabinet decision, this Committee will oversee the implementation of strategies developed by the National Committee. It will be responsible for issuing decisions and guidelines, ensuring that they are implemented by all relevant entities. This oversight body reflects the UAE's commitment not just to creating strong strategies, but to ensuring their effective execution.
The Decree also establishes a General Secretariat to support the National Committee's operations. The Secretary-General, who leads this Secretariat, will serve as Vice-Chairperson of the National Committee and a member of the Supreme Committee, facilitating seamless coordination between the operational and strategic levels of the UAE's AML and CFT framework. This structure creates an integrated system, enabling the UAE to respond swiftly and effectively to emerging financial crime threats.
The Supreme Committee will play a central role in overseeing the entire AML and CFT framework, issuing essential decisions, and ensuring that strategies are effectively implemented across all sectors. It will also lead the development of the Mutual Evaluation Report, assessing the UAE's compliance with international standards and strengthening its legal framework in line with global best practices.
The creation of the National and Supreme Committees, along with the General Secretariat, represents a major leap forward in the UAE's fight against financial crimes. By clearly defining roles and enhancing oversight, these bodies will ensure that Financial Institutions (FIs), Designated Non-Financial Businesses and Professions (DNFBPs), and other stakeholders collaborate more effectively. Key features of this enhanced framework include improved information flow, streamlined reporting processes, and consistent application of AML and CFT strategies across all sectors.
Moreover, the Decree assigns significant legal responsibilities to the General Secretariat and the Secretary-General. The General Secretariat will oversee the daily operations of the National Committee, ensuring that its strategies and policies are effectively implemented. As the critical link between the National and Supreme Committees, the Secretary-General will ensure the execution of the Supreme Committee's decisions, playing a pivotal role in maintaining the consistency and effectiveness of the UAE's AML and CFT initiatives.br />
In summary, this Decree marks a critical milestone in the UAE's ongoing legal evolution in the fight against financial crimes. By proactively updating its laws to address emerging challenges and aligning with international best practices, the UAE is reinforcing its commitment to a robust and adaptable legal framework. The establishment of the National and Supreme Committees, along with the introduction of innovative standards, will significantly enhance the country's ability to safeguard its financial system and ensure compliance with global norms.
Ultimately, the new Decree strengthens the UAE's AML and CFT efforts by emphasizing transparency and accountability. It may set a benchmark for future legal reforms and reinforces the UAE's global leadership in this area. Key features of this enhanced framework include improved information flow, streamlined reporting processes by reducing bureaucracy, and consistent application of AML and CFT strategies across all sectors. For businesses in the UAE, this unified structure will streamline communication, facilitate compliance, and provide a centralized point for advice and support. It will also improve coordination between public and private sectors, enhancing overall communication and efficiency.
This article was originally published by Finance Middle East
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