UAE develops strategy to crack down on financial crime

Ministry of Economy has set up an anti-money laundering department to oversee compliance to local laws

Changes to the Commercial Companies' law are expected to boost FDI to the UAE and spur business activity. Reem Mohammed/The National

The UAE's Ministry of Economy said on Tuesday it developed a strategic plan encompassing new initiatives to tackle money laundering.

The ministry also established a new anti-money laundering department to implement its plan, create awareness and to oversee all non-financial businesses and professionals to ensure compliance with the rules. Its remit covers companies operating both onshore and within commercial free zones, it said in a statement.

The ministry "is eager to ... contribute to supporting the UAE’s anti-money laundering efforts, to enhance the country’s technical commitment to international recommendations and treaties in this field and raise its performance across relevant global indicators," Abdullah Al Saleh, undersecretary of the Ministry of Economy said.

The ministry will oversee professions in non-financial sectors that are most exposed to the risks of money laundering. These include independent accountants and auditors, property brokers, companies service providers and dealers of precious metals and gemstones.

The ministry "is keen on intensifying communication with this sector to educate it about the dangers of money laundering" and to create awareness of laws passed in 2018 on combating money laundering and the financing of terrorism, he added.

The UAE has sought to tighten rules in a bid to stamp out money laundering in recent years. In August, the Cabinet passed a law requiring that companies both onshore and offshore (excluding those in the DIFC and ADGM) must report details of who the Ultimate Beneficial Owner of the business is. Details needed to be filed to the relevant governing authority by the end of last month.

In April, the Financial Action Task Force, the global money laundering and terrorist financing watchdog, said the UAE had "significantly strengthened" its regulatory framework to fight financial crime but added that as a major hub it should take urgent action to cut out the criminal financial flows that are attracted to it.

"In recent years, the UAE has significantly strengthened relevant laws and regulations and has put in place a range of committees to improve national co-ordination and co-operation. While the country needs to swiftly address a number of remaining issues, the elements of an effective framework to detect and prevent criminals and terrorists from misusing the financial system are mostly in place," FATF said in its Mutual Evaluation Report, following a visit to the Emirates last year.

The UAE's economy minister, Abdulla bin Touq, said the ministry and its partners have been keeping pace with ongoing development in anti-money laundering rules since its first federal law on the matter was issued in 2002.

The new anti-money laundering department will add further value to the progress made in strengthening anti-money laundering rules over the past three years, he added.