Learn More: Procedures in Filing a Case for Money Laundering in the UAE Courts

Overview of Money Laundering Laws

Money laundering and related illegal activities are considered a threat not only to the economic stability of a nation, but also have the potential to weaken financial institutions and lead to an increase in crime and corruption, amongst others.

Like other countries of the world, the United Arab Emirates is committed to combat these illegal activities. It has issued laws, rules, and policies which detect financial crimes in the country and prevent the transfer of funds from any criminal activity in the UAE.

For this purpose, the UAE has passed the Federal Decree-Law No. 20/2018 On Combating Money Laundering Crimes, the Financing of Terrorism and the Financing of Unlawful Organisations (Money Laundering Law). The Money Laundering Law was issued to combat criminal money laundering activities and terrorism financing operations.

Penalties

According to Article 22 of the Money Laundering Law, any person who commits money laundering in the UAE will be punished with imprisonment for at least 1 year and up to 10 years. The perpetrator could also be punished with fines which could range between AED 100,000 to AED 5 million or either fine or imprisonment.

The punishments are harsher if the money laundering crime is committed by the perpetrator who has abused his influence or power vested in him by virtue of his profession, committed through a non-profit organization or an organized criminal group or if he is a repeat offender. In these cases, the punishments include temporary imprisonment (up to 15 year) and fines of AED 300,000 and AED 10 million.

Money Laundering Cases – Public Prosecution & Special Courts

Under Article 6 of the Money Laundering Laws, no criminal proceedings will be instituted against the perpetrator of money laundering except by the public prosecutor or whoever he delegates.

If there is sufficient evidence of occurrence of crime, the public prosecutor, either on its own or upon the request of the law enforcement authorities, may request direct access to accounts, records and documents held by third parties, identify, track and seize funds, control accounts, and even issue travel bans and other procedures which will aid in uncovering crime and the perpetrators under Article 7/1 of the Money Laundering Law.

To support UAE’s efforts to persecute perpetrators to combat financial crimes, the UAE has established special anti-money laundering courts, at the federal and local level, to deal with money laundering crimes.

In case it is established that the crime of money laundering has been committed, the court has the right, under Article 26/1 of the Money Laundering Law, to order the confiscation of the funds which are subject of the money laundering crime, its proceeds and whatever is used to commit the crime. In case confiscation proves impossible, the court will order that the funds owned by the perpetrator that is of equal value to the funds, proceeds and instrumentalities, should be confiscated instead.

Further, Article 26 of the Money Laundering Law states that the court shall impose a fine of equal value if it is impossible to order the confiscation of funds, proceeds, or instrumentalities due to impossibility of seizure or because of bona fide rights of third parties.

Deportation of Foreigners in Money Laundering Crimes

If a foreigner commits a money laundering crime or any other felony under the Money Laundering Law and a custodial sentence has been issued against them, he shall be deported from the UAE under Article 29/1 of the Money Laundering Law.

However, in case foreigner has committed a misdemeanour (crime which results in imprisonment of 3 years maximum), then the court may, under Article 29/2 of the Money Laundering Law, order for his deportation from the country in addition to the custodial sentence or deportation in lieu of the custodial sentence.

It is also crucial to note that the statute of limitation is not applicable to money laundering crimes.

Conclusion

The strict legal framework and other actions have been taken by the UAE to implementing the procedures and measures that would contribute to combatting crimes of money laundering and financing of terrorism and other illegal financial crimes.

Dr. Hassan Elhais is a legal consultant in Dubai, specializing in the drafting of all statements of claim, memos and consultation on litigation of all manner.