UAE strengthens regulatory framework to tackle money laundering

 The UAE strengthened its regulatory and legislative framework to combat money laundering and terrorist financing, Minister of Economy Abdullah bin Touq said.

“Money laundering is a global concern for the integrity and stability of the financial sector and has a profound impact on the economy in general. This is discouraging foreign investment and distorting international capital flows,” Mr bin Touq told the Future of Finance Conference, which was organised by the Central Bank of the UAE.

The potential threats from money laundering “inevitably spill over to the financial stability of the state and the performance of its overall economy, which results in output gaps, welfare losses and distortion in neighbouring economies”, he said.

The UAE, the Arab world’s second-largest economy, has strict laws to prevent money laundering and the financing of terrorism and has issued several regulations over the past couple of years to clamp down 
on financial crimes.

The country this year established the Executive Office of Anti-Money Laundering and Counter Terrorism Financing, an agency to tackle money launderers, organisations and people suspected of financing terrorists and organised crime.

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 last year 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.

“Being fully aware of the significance of confronting any practices, we have developed an integrated system of national laws and regulations related to combating money laundering and financing of terrorism,” Mr bin Touq said on Thursday.

“Our system, characterised by force and deterrence and effective controls, hinders criminals from using the UAE as a safe haven for criminal practices.”

He said several committees were formed to implement the national strategic objective to tackle the problem in line with the recommendations of the global Financial Action Task Force, an intergovernment organisation based in France that develops policies to combat money laundering. The FAFT is an initiative of the G7 group of countries.

The Ministry of Economy also unveiled a campaign earlier this year to ensure that more than 500,000 non-financial businesses in the UAE submit data on their ultimate beneficiaries as it continues to implement new policies to combat the problem.

As part of the plan, companies were asked to register their real beneficiary and list the required data with their regulatory body's licensing systems to tackle money laundering.

The real beneficiary is defined as the person owning the company, or directly or indirectly controlling the company by virtue of owning more than 25 per cent of the entity, and 25 per cent or more of the voting rights.



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