Introduction:
The law on combating money laundering crimes, the financing of terrorism, and the financing of unlawful organizations was enacted by Federal Decree-Law No. 20 of 2018. The UAE government further amended this law with Federal Decree-Law No. 26 of 2021 and Federal Decree-Law No. 7 of 2024. These amendments will improve financial security by ensuring that it satisfies the new international standards. The aim and purpose of these amendments are to concentrate on financial crime.
Key Developments in Anti-Money Laundering Legislation
Federal Decree-Law No. 20/2018 initially established the AML regime of the UAE. Still, the difficulty and nature of financial crime required the need for further enhancement in the form of Federal Decree-Law No. 26/2021. Furthermore, the most recent amendment, Federal Decree-Law No. 7/2024, introduces the essential changes that will benefit in combating financial crimes effectively.
The new amendment of Article 11 discusses the National Committee for Combating Money Laundering crimes. According to this article, the governor will be in charge of this committee that will coordinate AML activities across the country. The cabinet formation was proposed by the Minister of Finance. The UAE's AML regulations have been established through coordinated efforts.
Establishment of the Supreme Committee
Another update in the AML legal framework is Article 12 bis 1, which stipulates the establishment of the Supreme Committee in charge of supervising the National Strategy to Combat Money Laundering and Terrorism Financing. This committee shall be established under the Presidential Court, and its formation and operating system shall be determined by a Cabinet decision, and it shall exercise the following powers:
- The Supreme Committee will study, monitor, and assess the effectiveness of strategies and procedures adopted by the National Committee. It will provide recommendations and decisions to enhance the AML framework.
- It will determine the requirements that the National Committee and other concerned entities must meet, supervising their execution.
- The committee will coordinate with relevant entities, ensuring they provide necessary support to the National Committee.
- It shall oversee the mutual evaluation process for measuring UAE adherence to relevant international AML standards.
- The committee shall suggest draft laws and amendments to existing laws, which it then submits to the Cabinet.
- It shall propose the necessary financial allocations for federal entities responsible for the implementation of the national AML strategy.
- The Supreme Committee may assume such other functions as prescribed by the Cabinet.
The Cabinet may authorize the Chairman of the Supreme Committee to issue the work system for the committee.
Article 12 bis 2 introduces the General Secretariat of the National Committee. To support the work of the National Committee, this body shall be headed by a Secretary General, who shall be the Deputy Chairman of the National Committee and a member of the Supreme Committee. The Cabinet shall appoint the Secretary General.
The fundamental functions of the General Secretariat are:
- The Chairman of the Supreme Committee shall issue decisions to regulate the structure, powers, and financial and administrative regulations of the General Secretariat. It is permitted to authorize the Chairman of the National Committee to issue some of these decisions.
- The Chairman of the National Committee is allowed to amend the organizational structure of the General Secretariat below the level of departments.
New Amendments
These amendments constitute a major step forward by the UAE towards an efficient approach to dealing with the misappropriation of finances.
The establishment of the National Committee and the Supreme Committee, with the creation of the General Secretariat, establishes a more formal and systematic approach to money laundering and terrorism financing.
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