The UAE’s Ministry of Economy has started a campaign to ensure that more than 500,000 non-financial businesses in the country submit data on their ultimate beneficiaries.
Property brokers, account auditors, dealers of precious metals and gemstones and corporate services providers are being encouraged to register the required data before the campaign ends on June 30, said Safeya Al Safi, director of the ministry's anti-money laundering department, yesterday.
Declaring a company’s ultimate beneficiary is “one of the main requirements for completing disclosure and transparency requirements from enterprises and individuals within the anti-money laundering system in the country”, Ms Al Safi said.
“The ministry seeks to enhance understanding and raise awareness among these establishments ... [about] the dangers of money laundering, their methods and means of protection against it.”
Registering with the anti-money laundering system is a mandatory step for designated non-financial businesses and professionals, or DNFBPs, but it is not the only one, she said.
The UAE has strict laws to thwart money laundering and the financing of terrorism and has issued various regulations over the past couple of years to strengthen the fight against financial crimes.
The country established the Executive Office of Anti-Money Laundering and Counter Terrorism Financing, an agency to tackle money launderers, entities and people suspected of financing terrorists and organised crime earlier this year.
In November, the Ministry of Economy set up an anti-money laundering department while a court was established in Abu Dhabi to tackle money laundering and tax evasion.
The UAE Central Bank also instructed all hawala providers – informal fund transfer agents operating outside the banking system – to register with the regulator to strengthen oversight of money transfers last year.
Ms Al Safi said money laundering operations "lead to lower rates of real growth, destabilisation of financial and banking systems, instability of prices and a weakening of capital and productive sectors”.
The ministry may add more sectors and professions to the current list of brokers, property agents, auditors, dealers of precious metals and gemstones and corporate service providers required to submit details of their ultimate beneficiaries, officials said.
“The law allows that,” said Mohammed Jannahi, head of money laundering control at the ministry.
The ministry intends to register 513,000 businesses licensed by 38 authorities in the campaign. Those that fail to divulge the required data will face penalties of up to Dh100,000 ($27,229) from July, said Ahmed Al Hosni, director of commercial registration at the ministry.
The ministry classifies the ultimate beneficial owner as person who has direct or indirect ownership of at least 25 per cent of a company’s capital or someone who holds the right to vote on 25 per cent or more of its shares.
Data collected by government entities will be handled with “highest levels of confidentiality”, he said.
“It will not be used for any commercial purposes, and even the employees of these government entities do not have free access to this data except in cases of investigations and [for] the required disclosure to specific official entities, according to strict internal policies and regulations,” Mr Jannahi said.
The ministry's officials also urged companies to conduct thorough due diligence on their clients and complete know-your-customer processes to mitigate money laundering risks.