Money Laundering methods and penelties
Penalties for Not Complying with AML/CFT requirements in Dubai – UAE
Who is held responsible for money laundering?
According to Article 2 of the Federal Decree-Law No. (26) of 2021, any person, having the knowledge that the funds are the proceeds of a felony or a misdemeanor, and who willfully commits any of the following acts, shall be considered a perpetrator of the crime of Money Laundering:
a. Transferring or moving proceeds or conducting any transaction with the aim of concealing or disguising their illegal source
b. Concealing or disguising the true nature, source, or location of the proceeds as well as the method involving their disposition, movement, ownership of or rights with respect to said proceeds
c. Acquiring, possessing, or using proceeds upon receipt
d. Assisting the perpetrator of the predicate offense to escape punishment
What are the penalties for ML offenses in UAE?
The penalties, which apply to both the staff and the FI (Financial Institution), can include sanctions being imposed on the FI, financial penalties, criminal prosecution, or both, resulting in fines and/or imprisonment.
Article 14 of Federal Decree-Law No. (26) of 2021 states:
i. Warning
ii. Administrative fine of no less than AED 50,000 (fifty thousand dirham) and no more than AED 5,000,000 (five million dirham) for each violation.
iii. Banning the violator from working in the sector related to the violation for the period determined by the supervisory authority.
iv. Constraining the powers of the Board members, supervisory or executive management members, managers, or owners who are proven to be responsible for the violation, including the appointment of a temporary supervisor.
v. Arresting Managers, board members, and supervisory and executive management members who are proven to be responsible for the violation for a period to be determined by the Supervisory Authority or request their removal.
vi. Arrest or restrict the activity or the profession for a period to be determined by the supervisory authority.
vii. Cancel the License.
The Supervisory Authority may, upon imposing the administrative penalties, request regular reports on the measures taken to correct the violation.
Penalties for individuals include (Article 22):
1. Any person who commits or attempts to commit any of the acts set forth in Clause (1) of Article 2 of this Decree-Law shall be sentenced to imprisonment for a period not exceeding ten years and to a fine of no less than AED 100,000 (one hundred thousand dirham) and not exceeding AED 5,000,000 (five million dirham) or either one of these two penalties.
2. An attempt to commit a money laundering offense shall be punishable by the full penalty prescribed for it.
3. A life imprisonment sanction or temporary imprisonment of no less than ten years and a penalty of no less than AED 300,000 (three hundred thousand dirham) and no more than AED 10,000,000 (ten million dirham) is applied to anyone who uses Proceeds for terrorist financing.
4. A temporary imprisonment sanction and a penalty of no less than AED 300,000 (three hundred thousand dirham) and no more than AED 10,000,000 (ten million dirham) shall be applicable to anyone who uses the Proceeds in financing illegal organizations.
Avoid penalties and fines by ensuring that your organization is up-to-date with all regulatory requirements for AML/CFT/Audit.
