Check the UAE's Federal Decree-Law No. 20/2018, which combats money laundering and terrorism financing. Learn about enhanced investigative powers, financial institution obligations, and penalties for financial crimes.
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00:00Key Laws that Combat Money Laundering and Terrorism Financing in UAE Business
00:07The UAE has implemented measures to combat money laundering,
00:10terrorism financing and the financing of unlawful organizations,
00:14with Federal Decree Law No. 20-2018 serving as a pivotal legislation in this regard.
00:20Enacted to safeguard the integrity of the UAE's financial system
00:24and uphold its international commitments, this law outlines comprehensive provisions aimed at
00:29detecting, preventing and prosecuting illicit financial activities.
00:33Enhanced investigative powers, Article 7 of Federal Decree Law No. 20-2018 grants
00:39the public prosecution and law enforcement authorities the authority to access accounts,
00:43records and documents held by third parties, including the ability to request direct access
00:48to stored data in computer systems and information technology programs.
00:52This enables the identification, tracking and seizure of funds associated with criminal
00:57activities. Furthermore, the law empowers law enforcement authorities to conduct undercover
01:01operations and adopt various investigative methods to uncover crimes or identify perpetrators.
01:07Establishment of Financial Intelligence Unit or FIU
01:11Article 9 introduces the establishment of an independent financial intelligence unit, FIU.
01:16Tasked with receiving and analyzing suspicious transaction reports from financial institutions
01:22and designated non-financial businesses, the FIU is important in examining these reports,
01:27identifying potential threats, and referring relevant information to competent authorities
01:32for further action. Additionally, it facilitates international cooperation by exchanging
01:37information with counterpart agencies in other states, thereby enhancing the global fight against
01:42financial crimes. Obligations on Financial Institutions
01:47Under Article 16 of the Decree Law, financial institutions and designated
01:51non-financial businesses are required to conduct risk assessments, implement due diligence measures
01:57and develop internal controls to mitigate the risk of money laundering and terrorism financing.
02:02These entities must also maintain records of all transactions, cooperate with law enforcement
02:07authorities and comply with directives issued by competent authorities, including those related
02:12to UN Security Council resolutions. International Cooperation and Legal Assistance
02:17Articles 18 and 19 outline provisions for international cooperation and legal
02:21assistance in combating financial crimes. The UAE Judicial Authority is obligated to assist
02:26foreign authorities in investigating and prosecuting money laundering, terrorism financing and related
02:32offenses. Similarly, the UAE commits to promptly responding to requests for information and
02:37cooperation from foreign entities subject to certain conditions outlined in the law.
02:42Penalties and Enforcement
02:44The Decree Law stipulates significant penalties for individuals and entities found guilty of
02:48money laundering, terrorism financing or related offenses. Penalties are preventing illicit
02:53financial activities and ensuring compliance with anti-money laundering and counterterrorism
02:58financing measures. Individuals convicted of money laundering may face imprisonment ranging
03:03from 1 to 10 years, fines ranging from 100,000 to 5 million dirhams or a combination of imprisonment
03:10and fines. Aggravating factors such as abuse of influence, involvement in organized crime or
03:16recidivism may result in higher fines and longer prison sentences, with fines ranging from 300,000
03:22to 10 million dirhams. The provisions regarding confiscating proceeds from illegal activities
03:28are outlined in Article 26, empowering courts to order the confiscation of funds,
03:33proceeds and instrumentalities derived from money laundering or terrorism financing activities.
03:39Additionally, it allows for imposing fines in lieu of confiscation under certain circumstances.
03:44The enforcement procedures under the Decree Law involve comprehensive investigation and
03:48prosecution by law enforcement authorities including evidence gathering, witness interviews
03:53and the use of investigative methods like undercover operations. Judicial proceedings
03:58ensure defendants' rights to legal representation in a fair trial, with appeals available for
04:03convicted individuals through the judicial system. Confiscation orders issued by courts target
04:08illicit funds and assets which are forfeited to the government to compensate victims or fund
04:13anti-crime initiatives, as outlined in Article 26. Conclusion, Federal Decree Law No. 2020-18
04:20represents a cornerstone in the UAE's efforts to combat money laundering and terrorism financing.
04:25By establishing robust legal frameworks, enhancing investigative powers, promoting
04:30international cooperation and imposing penalties, the UAE is safeguarding its financial system and
04:36combating illicit financial activities. For more of our latest updates,
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