The UAE's Ministry of Economy said on Tuesday it has taken more steps to ensure compliance with ultimate beneficiary ownership procedures – a crucial step to improve transparency within the economy and effectively prevent money laundering.
As part of the latest update, the ministry said it will allow licensing authorities in commercial freezones and those across the country to penalise companies that do not comply with the ultimate beneficiary ownership procedures.
"The submission of ultimate beneficial owner data is a necessary step to effectively disclose and reveal the complex structures related to the chain of ownership and its beneficial owner in licensed establishments in the UAE," the ministry said in a statement.
The UAE has strict laws to counter 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.
Last year, the Ministry of Economy also set up an anti-money laundering department.
The latest move came after the ministry conducted a campaign in May to ensure that more than 500,000 non-financial businesses in the country submit data on their ultimate beneficiaries.
So far, the compliance rate of providing ultimate beneficial owner data is at 62.1 per cent, with 284,129 companies disclosing the necessary data, the ministry said. It has conducted more than 14 online workshops with 38 licensing authorities to raise awareness and discuss challenges related to the process.
The implementation of penalties for non-compliance will start on July 1 after the grace period to submit the relevant data ends on June 30.
Penalties for non-compliance will begin with a written warning, followed by a fine of Dh100,000 in the event of repetition and non-compliance. Additional administrative penalties will include the suspension of a company's licence or restrictions on the powers of a company's board or of the services provided to them.
Steps that companies need to take to ensure compliance with ultimate beneficiary data
- Create a record of the ultimate beneficial owner information, keep it within their documents and present this record upon request from the relevant authorities.
- Give an undertaking that they are responsible for the accuracy of the data submitted to their licensing authority
- File the ultimate beneficial owner's information within the licensing authorities' systems through dedicated web pages on their official websites.