criminal law

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July 15, 2021

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As UAE is increasingly characterized as an economical hub, economic security is regarded as one of the most important issues in an ever-growing economic hub of the middle east. An aspect is appreciated increasingly about the whistleblowing where the employees play a critical role with respect to the wrongdoings in the company. It even helps in raising the confidence in the market along with the effort to popularize the concept of good corporate governance.

The UAE law explicitly does not define the concept of whistleblowing. What is meant by the whistleblowing is the act of unveiling the illegal practices by the employees or the ex-employees that are carried on within the organization. The concept of whistleblowing is covered under the penal code of the UAE which includes a requisite whereby all the individual are required to report any type of criminal activity. But, when it comes to practice, the offense of whistleblowing is not the one that is rigorously imposed.

It has yet another loophole, that it does not describe the unethical practices for which the criminal offense may be charged. It just provides with a protection to those who report any type of criminal activity. Unlike USA, until recently the government of the UAE did not provide for any type of protection to the whistleblowers, indicating to the fact that it was not a common practice in the middle east despite being a developed country, where whistleblowers were even given incentives for their act also.

Dubai law no. 4 of 2016, namely the law on financial crimes, was a first attempt to introduce the whistleblower protection in the UAE. The prerequisite for the following are that the disclosure must be true, disclosure of such activities might result in the endangering of the economic security of Dubai and that the disclosure must be made to the Dubai Center of Economic Security. Where all of the above criteria will be met, the disclosing party will be protected against any of the proceedings which may be led against him. However this concept does not have a wider scope. In addition to this, since, the concept has not been used so frequently, the employees still lack the trust in order to disclose the facts.

DIFC Attempts at Whistleblowing Law

Not only this, an attempt has been made by the DIFC Authority with respect to the whistleblowing law, in ways of the DIFC operating law no. 7 of 2018. It enumerates that the employees have yet another obligation to disclose certain types of conduct. Further, it also provides for the protection of the whistleblowers.

The DIFC law provides that as far as the registered entities of the DIFC are concerned ( also known as the registered persons) need to disclose the facts that are inclusive of, firstly, any act that contravenes any operating law or its regulations or any other law; secondly, the fact that involves non fulfillment of any obligation mentioned under any law and lastly, any other act which is set out in any law. The punishment for those who doesn’t fulfill the requirement of such disclosure will amount to USD10,000.

As far as the protection of the whistleblowers are concerned, the DIFC law provides that the ones who disclose such matters in good faith in accordance to the laws will not be be subject to any liability arising out of contractual terms or out of the legislative aspect. They will also be prevented from any kind of civil, contractual or other remedy. Further, protection of the employees from the removal from the employment by the employers is also provided for under this law. A punishment in contravention to these have been provided for in the form of a fine of USD 30,000.

If the employee, suspect any of the above acts, then in that case, the protection of whistleblowers is not included. It is limited to the ones which are true facts. Nonetheless, it provides with a chance to the company to improve their corporate governance with respect to the creation of policies related to the whistleblowing as well as their procedure and a regulation that will create a contractual obligation on the employees to report any kind of wrongdoing in the company.

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