RAS AL KHAIMAH INTERNATIONAL CORPORATE CENTRE … · RAS AL KHAIMAH INTERNATIONAL CORPORATE CENTRE ... The names and addresses its shareholders1 or if an individual its business associates.

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RAS AL KHAIMAH INTERNATIONAL CORPORATE CENTRE

REGISTRAR GUIDE ON ANTI-MONEY LAUNDERING AND COMBATING

TERRORIST OFFENCES

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This guide on the anti-money laundering and combating terrorist offences has been issued by the

Registrar pursuant to rules 25(1) and 53 of the RAK International Corporate Centre Registered Agent

Rules 2016 (the “Registered Agent Rules”). As per the compliance requirements of RAK International

Corporate Centre it is mandatory that the registered agents registered with RAK International Corporate

Centre shall maintain their AML/KYC Policies & Procedures and furnish the policies & procedures for

Registrar’s approval.

Compliance by a Registered Agent with this guide will not necessarily result in the Registered Agent

being found by the competent authorities of the United Arab Emirates to have complied with the anti-

money laundering laws of the United Arab Emirates. Accordingly, this guide is not a substitute for legal

advice and Registered Agents and their employees must ensure that they comply with all laws that apply

to them.

This guide is divided into 5 sections:

Part A: Know your client (KYC) Requirements

Part B: Document Retention Policies

Part C: Compliance Officer

Part D: Suspicious Transaction Reporting

Part E: Financing of Terrorism

Reference is made throughout this guide to:

(a) Federal Law No. 4/2002 (as amended by Federal Law No. 9/2014) on anti-money laundering and

combating financing of terrorism (the “Federal AML Law”);

(b) Cabinet Decision No. 38/2014 on implementing the Federal AML Law (the “AML Cabinet

Decision”); and

(c) Federal Law No. 7/2014 on Combating Terrorism Offences (the “Federal Law on Combating

Terrorism Offences”).

For ease of reference, English translations of the Federal AML Law and the AML Cabinet Decision are

scheduled to this guide.

Registered Agents should familiarise themselves and comply with all applicable laws, including the

Federal AML Law, AML Cabinet Decision and Federal Law on Combating Terrorism Offences.

Application of Federal AML Law and the AML Cabinet Decision to Registered Agents

The Federal AML Law and AML Cabinet Decision apply to ‘Other Financial, Commercial and

Economic Institutions’, which are defined as ‘institutions licensed and controlled by parties other than

the Central Bank or the Securities and Commodities Authority of the United Arab Emirates”. Registered

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Agents licensed by the Registrar would fall within this definition. The application of the Federal AML

Law and the AML Cabinet Decision to Registered Agents is consistent with the Financial Action Task

Force’s recommendations in its note on “International Standards on Combatting Money Laundering and

the Financing of Terrorism & Proliferation” (see http://www.fatf-

gafi.org/publications/fatfrecommendations/documents/fatf-recommendations.html) which recommends

that the customer due diligence and record keeping recommendations apply to designated non-financial

businesses and professions, which expressly include registered agents.

http://www.fatf-gafi.org/publications/fatfrecommendations/documents/fatf-recommendations.html

http://www.fatf-gafi.org/publications/fatfrecommendations/documents/fatf-recommendations.html

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PART A

KNOW YOUR CLIENT (KYC) REQUIREMENTS

General Requirements

As is required by articles 4 and 5 of the AML Cabinet Decision, every Registered Agent must ensure that

it identifies its customers and their beneficial owners and that this information is kept up to date. In

addition, under the RAK ICC AML Rule, each Registered Agent must maintain a register of the ultimate

beneficial owners of each body corporate of which it is the Registered Agent specifying the full name and

address of each ultimate beneficial owner.

Under the RAK ICC AML Rule, “ultimate beneficial owner” means each individual who ultimately owns

or controls, directly or indirectly and legally or beneficially, shares, capital, a right to profits or voting

rights of the body corporate or partnership of which the Registered Agent acts or any individual who

otherwise exercises control over the management of such body corporate or partnership provided that

where the shares (or an interest in respect of the shares) of either—

(a) any body corporate for which the Registered Agent acts; or

(b) any body corporate that owns or controls, directly or indirectly and legally or beneficially, shares

or voting rights of the body corporate for which the Registered Agent acts,

are listed on an investment exchange, ultimate beneficial owners shall mean the individuals who own or

control, directly or indirectly and legally or beneficially, 5 per cent. or more of shares or voting rights of

the body corporate whose shares are listed on an investment exchange.

Please note that, in line with the standard practice of banks operating in the United Arab Emirates to

identify every ultimate beneficial owners of a customer, the requirements set out above in relation to the

identification of ultimate beneficial owners are more rigorous than those set out in article 4 of the AML

Cabinet Resolution.

Detailed Requirements

Article 4 of the AML Cabinet Decision requires each Registered Agent to maintain copies of certain

official documents confirming the identity of its customers and the ultimate beneficial owners of each

body corporate for which it is the Registered Agent.

For these purposes, a ‘customer’ is the person or persons who have engaged a Registered Agent to

provide registered agent services (for example, the person who has instructed a Registered Agent to

incorporate a company). While the customers will typically be the company or the ultimate beneficial

owners of the company, this may not always be the case.

Registered Agents are expected to collect the following information and documents in respect of each

customer and each ultimate beneficial owner:

A. In respect each customer

1. Information to be confirmed by the Registered Agent (a) Its legal form (if a body corporate).

(b) Its name.

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(c) Its country of incorporation or (if an individual) nationality.

(d) Its profession or business.

(e) Its registered office or (if an individual) principal residential address.

(f) The identities of its legal representatives and any attorney.

(g) The names and addresses its shareholders1 or if an individual its business associates.

2. Documents to be collected (a) A copy of its constitutional documents.

(b) A valid commercial or professional license accredited by an appropriate body (e.g., the

United Arab Emirates’ Ministry of Economy, relevant local licensing authorities, relevant

free zone authorities, the United Arab Emirates’ Ministry of Labour, or Ministry of Social

Affairs).

B. In respect of each ultimate beneficial owner of each company or partnership of which it is

the registered agent

1. Information to be confirmed by the Registered Agent

(a) His or her name (as verified by an identity card or passport).

(b) His or her nationality, country of residence and nationality.

(c) The name and address of the individual’s employer (if any).

2. Documents to be collected

(a) A true copy of their identity card or a valid passport.

(b) Utility bill dated in the last 3 months showing his or her residential address.

(c) Bank reference letter.

(d) 6 months’ bank statements.

(e) CV including details of any professional qualifications.

Under article 5(d) of the AML Cabinet Decision, Registered Agents are required to regularly and

periodically update all information and data related to customers’ identity.

Registered Agents may find it useful to review the Financial Action Task Force’s note on transparency

and beneficial ownership: http://www.fatf-gafi.org/media/fatf/documents/reports/Guidance-transparency-

beneficial-ownership.pdf

Politically exposed persons

Senior management approval of the Registered Agent [Note to draft: We would recommend against

having RAK ICC ‘approving’ politically exposed persons as who are UBOs; there is a risk that

Registered Agents will seek to have RAK ICC ‘bless’ their decisions as a means of absolving them of their

responsibilities under UAE law and RAK ICC could risk criticism from onshore authorities or its decions]

should be obtained before an individual who is a politically exposed person (or who has a family member

1 All shareholders should also be identified save where the legal person in respect of which they are a

shareholder is listed on an investment exchange in which case shareholders need only be identified where

they own or control, directly or indirectly, legally or beneficially, 5 per cent. or more of the shares or

voting rights of the legal person concerned.

http://www.fatf-gafi.org/media/fatf/documents/reports/Guidance-transparency-beneficial-ownership.pdf

http://www.fatf-gafi.org/media/fatf/documents/reports/Guidance-transparency-beneficial-ownership.pdf

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or close associate who is a politically exposed person) is taken on as a customer or is a beneficial owner

of a customer.

“Politically exposed persons” are defined in the AML Cabinet Decision as being “physical persons who

are or have been entrusted with prominent public functions in a foreign country, such as presidents or

prime ministers, high level politicians and governmental personalities, senior judicial or military officers,

senior chief executive officers of state-owned companies, political party leaders, and individuals who are

or have been entrusted with prominent public functions at international organizations”.

Under article 5(c) of the AML Cabinet Decision, the origin of the wealth of politically exposed person

must be verified.

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PART B

DOCUMENT RETENTION POLICIES

Registered Agents are expected to comply with their obligations under article 6 of the AML Cabinet

Resolution by retaining copies of all documents relevant to each body corporate for a period of at least

five years from:

(a) ceasing to be the registered agent of that body corporate, provided that they complied with Rule

31 (Transfer of Records) of the Registered Agent Rules; and

(b) the date of that body corporate’s winding up, striking off or liquidation pursuant to Part XII of the

RAK ICC Business Companies Regulations 2016.

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PART C

COMPLIANCE OFFICER

Registered Agents are expected to comply with their obligations under article 8 of the AML Cabinet

Resolution by appointing a compliance officer (a “Compliance Officer”).

Registered Agents must allow their Compliance Officer to work independently in performing the

following tasks:

(a) detecting money laundering transactions and the financing of terrorism and unlawful

organizations;

(b) perusing files and receiving, examining and studying data on suspicious transactions;

(c) reviewing rules and procedures related to combating money laundering and the financing of

terrorism and unlawful organizations, and ensuring the compliance of the Registered Agent with

these rules and procedures and proposing any necessary updates thereof;

(d) drafting and submitting mid-yearly reports to the senior management of the Registered Agent;

and

(e) preparing and delivering training programs and plans to instruct institutions employees on money

laundering and the financing of terrorism and unlawful organizations, and the means of

combating the same.

Under article 9 of the AML Cabinet Resolution Registered Agents must prepare and deliver training

programs and workshops for Compliance Officers and other employees working in the field of combating

money laundering and the financing of terrorism and unlawful organizations.

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PART D

SUSPICIOUS TRANSACTION REPORTING

Registered Agents must comply with their obligation under article 12b(2) of the Federal AML Law and

article 7 of the AML Cabinet Resolution to notify suspicious transactions to the United Arab Emirates’

Financial Intelligence Unit for Anti-Money Laundering and Suspicious Cases.

Registered Agents are reminded that it is an offence under article 16 of the Federal AML Law to reveal to

another person information under review in connection with a suspicious transaction or that suspicious

transactions are under review by a competent authority. Registered Agents are not required to report

suspicious transactions directly to the Registrar. [Note to draft: We would recommend that the Fines

Regulations remain silent on fines that may be imposed by other authorities. However, we could revise

the Registered Agent Rules so that a breach of rule 25 gives rise to a fine?]

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PART E

FINANCING OF TERRORISM

Registered Agents are reminded of the penalties applicable under the Federal Law on Combating

Terrorism Offences.

In particular, Registered Agents are reminded that it is a criminal offence under article 29 of the Federal

Law on Combating Terrorism Offences to:

(a) offer, collect, prepare, obtain or facilitate the obtainment of funds for the purpose of using same

in the commission of a terrorist offence;

(b) offer funds to a terrorist organisation or person or collect, prepare, obtain or facilitate the

obtainment of funds for such terrorist organisation of person while aware of such organisation’s

or person’s purpose; or

(c) acquire, take, manage, invest, possess, transmit, transfer, deposit, keep, use or dispose of funds or

carry out any commercial or financial bank transaction if they are aware that that all or part of

such funds are collected as a result of a terrorist offence, owned by a terrorist organisation or

intended for the financing of a terrorist organisation, person or offence.

It is also a criminal offence under article 30 of the Federal Law on Combating Terrorism Offences to:

(a) transfer, transmit, deposit, or replaced funds for the purpose of concealing or camouflaging their

truth, origin or illegal purpose;

(b) conceals or camouflage the truth, origin, place, method of disposition, movement and ownership

of funds or the rights related thereto; or

(c) acquire, possess, use, manage, keep, invest, replace or deal in funds for the purpose of concealing

or camouflaging their truth, origin or illegal purpose,

where the funds in question were in whole or in part, collected as a result of a terrorist offence, owned by

a terrorist organisation, illegal, owned by a terrorist person or intended for the financing of a terrorist

organisation, person or offence.

Article 35 of the Federal Law on Combating Terrorism Offences also imposes certain reporting

obligations on persons who learn of the planning or commission of a terrorist offence.

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SCHEDULE

PART I: FEDERAL AML LAW

Please note that in the event of any inconsistency the Arabic version of the Federal AML Law will prevail

and that no guarantee is given as to the accuracy of the below translation.

On Anti-Money Laundering and Combating Financing of Terrorism

Federal Law No. 4/2002

Issued on 22/01/2002

Corresponding to 8 Dhi Al- Qi’dah 1422 H

Amended by virtue of:

Federal Law No. 9/2014 dated 26/10/2014

We, Zayed Bin Sultan Al Nahyan, President of the United Arab Emirates State, Pursuant to the perusal of

the Constitution,

Federal Law No. 1/1972 pertaining to the Jurisdiction of the Ministries, the competences of the Ministers

and the amending laws thereof,

Federal Law No. 10/1980 pertaining to the Central Bank, the Monetary System and the regulation of the

Banking Profession and the amending laws thereof,

Penal Code issued by the Federal Law No. 3/1987,

Law of Criminal Procedures issued by the Federal Law No. 35/1992,

Federal Law No. 14/1995 on the Control of Narcotics and Psychotropic Substances,

Federal Decree No. 55/1990 on the consent to adhere to the United Nations Convention against Illicit

Traffic in Narcotic Drugs and Psychotropic Substances for the year 1988,

Acting upon the proposal of the Minister of Finance and Industry, the approval of the Federal National

Council and the ratification of the Federal Supreme Council,

Have promulgated the following Law:

The Title was replaced by virtue of Article 1 of Federal Law No. 9/2014 dated 26/10/2014.

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Article 1-Definitions

The provisions of Article 1 were replaced by virtue of Article 2 of Federal Law No. 9/2014 dated

26/10/2014, and became as follows:

In applying the provisions of this Law, the following terms and expressions shall have the meanings

assigned against each, unless the context requires otherwise:

State: The United Arab Emirates.

Ministry: The Ministry of Finance.

Minister: The Minister of Finance.

Central Bank: The Central Bank of the United Arab Emirates.

Authority: Securities and Commodities Authority.

Governor: The Governor of the Central Bank.

Committee: The National Committee on Anti-Money Laundering and

Combating Financing of terrorism.

Funds: Assets of every kind whether tangible or intangible, movable or

immovable including national currency, foreign currencies,

documents or deeds, in any form, including electronic or

digital, evidencing title to, or interest in, such assets.

Unit: The Financial Intelligence Unit for anti-money Laundering and

suspicious cases established in the Central Bank under Article 7

of the present Law.

Supervisory Authorities: Federal and local authorities entrusted by laws and various

regulations to control and licence financial institutions and

other financial, commercial and economical institutions.

Money Laundering: Any of the acts specified in Article 2 of this Law.

Proceeds: Any funds derived from or obtained, directly or indirectly

through the commission of a felony or a misdemeanour.

Suspicious Transactions: Transactions, where reasonable grounds arise to suspect, that

funds are the proceeds of a felony or a misdemeanour or are

related to financing of terrorism or to the financing of unlawful

organizations, whether these transactions are carried out or

attempted to be carried out.

Unlawful Organizations: Organizations whose establishment or any of their activities are

criminalized.

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Freezing or Seizure: Means temporarily prohibiting the transfer, conversion,

disposition, movement or exchange of funds on the basis of an

order issued by a competent authority.

Confiscation: Final deprivation of private property according to a judgment

issued by a competent court.

Instrumentalities: Any property used or intended to be used in any manner to

commit a felony or a misdemeanour.

Financial Institutions: A bank, finance company, exchange office or financial or

monetary intermediary or any other institution licensed by the

Central Bank or the Authority whether they are publicly or

privately owned.

Other Financial, Commercial and

Economical Institutions:

Institutions licensed and controlled by parties other than the

central bank or the Authority.

Financing of Terrorism: The provision, collection of funds, or to ensure obtaining or

transporting the same by any means, directly or indirectly, to

any association, entity, organization, centre, group, gang or any

persons against whom the provisions of Federal Law

No. 7/2014 on Combating Acts of Terrorism apply.

Financing of Unlawful Organizations: Any material conduct or legal disposition intended for the

provision of funds to an unlawful organization, or to any of its

activities or members.

Chapter 1

Definition of Money Laundering or Financing of Terrorism or Financing of Unlawful

Organizations2

Article 2



1. Any person, having the knowledge that the funds are the proceeds of a felony or a

misdemeanour, and who wilfully commit any of the following acts, shall be considered a perpetrator of

the crime of money laundering:

a. Transferring, transporting, depositing, safekeeping, investing or transforming the

proceeds of a crime or managing the same aiming to conceal or disguise their unlawful source.

b. Concealing or disguising the true nature, source or location of the proceeds as

well as the method involving their disposition, movement, ownership of or rights with respect to

said proceeds.

2 Any person, having the knowledge that the funds are the proceeds of a felony or a misdemeanour, and who

wilfully commit any of the following acts, shall be considered a perpetrator of the crime of money laundering:

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c. Acquiring, possessing or using the proceeds.

2. The crime of money laundering is considered as a separate crime and the punishment of

the perpetrator for the commission of the original crime shall not prevent that he shall be punished for the

crime of money laundering.

3. In order to prove the property is the proceeds of crime, it shall not be necessary that there

be a conviction for the crime.

Article 3

The financial facilities and other financial, commercial and economic facilities operating in the State shall

be criminally liable for the crime of Money Laundering or Financing of Terrorism or Financing of

Unlawful Organizations should it be committed intentionally in the name or on behalf thereof and such

without prejudice to the administrative sanctions set forth in the law.

Chapter 2 The Commitments of the Governmental Authorities and the Jurisdictions Thereof

Article 4

The Central Bank may order, in accordance with the present law, to freeze the suspected funds of the

financial facilities for a duration not exceeding seven days.

The Public Prosecution may order to retain the suspected funds, returns or means in accordance with the

procedures adopted thereby.

The competent court may order a precautionary seizure for an undefined duration of any funds, reserves

or means should they result from or be related to a Money Laundering or Financing of Terrorism or

Financing of Unlawful Organizations crime.

Article 5



1. Without prejudice to the provision of Article 4 of this Law, a criminal lawsuit against the

perpetrator of any of the crimes set forth in the present Law may only be initiated by the Public

Prosecutor.

2. The competent security authorities must, at the request of the public prosecutor or the

competent court, provide protection for the witnesses or defendants involved in the crimes of money

laundering, financing of terrorism and financing of unlawful organizations, if necessary, or whose lives

are endangered according to the procedures adopted in this regard.

3. Interim and sequestration decisions against funds at financial institutions may only be

carried out through the central bank.

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A new Article entitled Article 5 bis was added by virtue of Article 3 of Federal Law No. 9/2014

dated 26/10/2014.

Article 5 bis

1. In case the crime of money laundering, the financing of terrorism or the financing of

unlawful organizations is proved, the following shall be confiscated:

a. Funds and proceeds obtained from the commission of the crime of money

laundering or financing of terrorism or financing of unlawful organizations or property of

corresponding value.

b. Property, equipment, tools or instrumentalities used or intended to be used.

2. If funds or proceeds specified in Clause (1) of this Article have been transformed or

converted, in part or in full, into other property, such property shall be subject to confiscation.

3. If funds obtained from money laundering or financing of terrorism or financing of

unlawful organizations have been mixed with other property resulting from lawful sources, such property

shall be subject to confiscation within the limits of the estimated value of the property.

Article 6



Every person who enters or leaves the country in possession of currency or bearer negotiable instruments,

precious metals or valuable stones must disclose the same according to the disclosure regulation issued by

the central bank.

Article 7



1. A “Financial Intelligence Unit” for anti-money laundering and suspicious cases shall be

established in the central bank, to which suspicious transactions reports shall be sent from all financial

institutions and from other relevant financial, commercial and economical institutions; the committee

shall specify the form of the suspicious transactions report and the method of reporting.

2. The Unit must operate a database or a special record containing all relevant available

information which must be updated regularly. In addition it must provide access to information databases

to the law enforcement authorities so as to facilitate the investigations carried out thereby.

3. The Unit may share information with any other counterpart Units in other countries with

respect to suspicious transactions reports which it receives on the basis of international agreements to

which the State is a party or based upon reciprocity; this information must only be used for anti-money

laundering or combating financing of terrorism or financing of unlawful organizations.

4. Law enforcement authorities shall be responsible to follow up the reports received on

suspicious transactions or the proceeds of the crime as well as to gather evidence thereof.

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Article 8



1. The Financial Intelligence Unit shall examine the cases reported to it, and it must notify

the public prosecution which shall adopt necessary measures.

2. The public prosecution must directly seek the opinion of the Financial Intelligence Unit

on the reports received directly by it with respect to money laundering, financing of terrorism and

financing of unlawful organizations.

3. The Financial Intelligence Unit may obtain from all financial institutions and other

financial, commercial or economical institutions as well as from law enforcement authorities additional

information on suspicious transactions reports.

4. The Unit may seek information, data or reports from any non-profit association or

establishment whose activity is based on the collection of funds, receiving or granting funds when there is

suspicion of money laundering, financing of terrorism or finance of unlawful organizations or in case of

receiving reports or information from these associations or establishments.

Article 9



The Minister shall set up an Anti-Money Laundering Committee in the State, which shall be presided

over by the governor, and act under the name of “The National Committee on Anti-Money Laundering

and Combating Financing of Terrorism”. It shall be composed of one or more representatives of the

following authorities upon their nomination:

-The Central Bank.

-The Ministry of Interior.

-The Ministry of Foreign Affairs.

-The Ministry of Justice.

-The Ministry of Finance.

-The Ministry of Economy.

-The Ministry of Social Affairs.

-The Federal Customs Authority.

-The State Security Service.

-The authorities responsible for the issuance of commercial and industrial licenses.

The chairman of the committee may add other authorities to its membership.

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Article 10



The competent committee shall be competent to carry out the following:

1. Proposing regulations, procedures and policies with respect to anti-money laundering,

combating financing of terrorism and financing of unlawful organizations in the State.

2. Facilitating the exchange of information and coordination between authorities

represented therein.

3. Representing the State in international forums for anti-money laundering.

4. Proposing the regulation governing the work of the committee.

5. Any other matters referred to it by the competent authorities of the State.

Article 11



1. The central bank shall supervise the financial institutions and control their activities for

the purpose of ensuring compliance with the provisions set forth in the present law, its implementing

regulation and relevant regulations and decisions, and in particular the following:

a. Issuing decisions and instructions specifying the regulation on anti-money

laundering, combating financing of terrorism and financing of unlawful organizations at financial

institutions including the filing of suspicious transactions reports to the Financial Intelligence

Unit immediately upon occurrence.

b. Issuing decisions on administrative penalties imposed against financial

institutions in violation of the provisions of the present Law, its implementing regulation and

relevant decisions, in addition to the cases of imposition and grievances thereof.

c. The central bank may delegate some of the powers set forth in this Law to the

Authority.

2. Authorities responsible for the licensing and control of other financial, commercial and

economical institutions shall be responsible to monitor their activities to ensure compliance with the

provisions set forth in the present Law, its implementing Regulation as well as relevant regulations and

decisions; and in particular the following:

a. Issuing decisions and instructions specifying the regulation on anti-money

laundering, combating financing of terrorism and financing of unlawful organizations at other

financial, commercial and economical institutions including the filing of suspicious transactions

reports to the Financial Intelligence Unit immediately upon occurrence.

b. Issuing decisions on administrative penalties imposed against other financial,

commercial and economical institutions in violation of the provisions of the present Law, its

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implementing regulation and relevant decisions, in addition to the cases of imposition and

grievances thereof.

3. Administrative penalties that may be imposed according to Clauses (1) and (2) of this

Article are:

a. Warning.

b. A fine of at least (50000) fifty thousand dirhams up to (500000) five hundred

thousand Dirhams.

c. Banning the offender from working in the sector with relation to the offence for a

period specified by the supervisory authority.

d. Limiting the powers of the members of the board of directors and the members of

the executive or supervisory management, or its directors as well as controlling shareholders

including a temporary controller.

e. Cessation the activity for a period not exceeding one month.

f. Cancellation of license.

Article 12



All authorities must keep confidential any information obtained with respect to a suspicious transaction or

to the crimes mentioned in the present Law and to reveal such information only to the extent necessary for

their use in investigations, lawsuits or cases relating to the violation of the provisions of the present Law.


dated 26/10/2014.

Article 12 bis

1. Financial institutions must comply with the regulations and instructions on anti-money

laundering, combating financing of terrorism and financing of unlawful organizations issued by the

central bank, and other financial, commercial and economical institutions must comply with the

regulations and instructions on anti-money laundering, combating financing of terrorism and financing of

unlawful organizations issued by the supervisory authorities.

2. Other financial, commercial and economical institutions must report to the Unit

suspicious transactions on the form provided for such purpose.

Chapter 3 Sanctions

Article 13



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1. Any person who commits or attempts to commit one of the acts set forth in Clause (1) of

Article 2 of this Law shall be sentenced to imprisonment for a period not exceeding ten years and by a

fine not less than (100000) one hundred thousand dirhams and not exceeding (500000) five hundred

thousand dirhams or either one of these two penalties.

2. Financing of terrorism shall be subject to the penalties mentioned in Federal Law No. 7

of 2014 on Combating Acts of Terrorism.

3. The court may, on its own discretion and should there be many offenders, decide that the

criminal shall be exempt from the penalty of imprisonment mentioned in Clause (1) of this Article if he

reports to the competent authorities of the crime as well as of all other offenders before the discovery of

such crime by said competent authorities, and if such reporting has resulted in the detention of other

offenders or the property subject of the crime.

Article 14



An establishment which engages in any crime of money laundering, financing of terrorism or financing of

unlawful organizations shall be sentenced to a fine not less than (300000) three hundred thousand dirhams

and not exceeding (1000000) one million dirhams.

Article 15



Chairmen, members of the boards of directors, directors and employees of financial institutions and other

financial, commercial and economical institutions having knowledge of any act committed in their

institutions and in connection with a crime of money laundering, financing of terrorism or financing of

unlawful organization but fail to report these crimes to the Financial Intelligence Unit shall be sentenced

to imprisonment not less than (50000) fifty thousand dirhams and not exceeding (300000) three hundred

thousand dirhams or either one of these two penalties.

Article 16



Any person who reveals to another person information on transactions under review in connection with

suspicious transactions or that investigation is launched by competent authorities on suspicious

transactions shall be sentenced to imprisonment for a period not exceeding one year and by a fine not less

than (10000) ten thousand dirhams and not exceeding (100000) one hundred thousand dirhams.

Article 17

Whoever notifies with ill faith the pertinent parties of the perpetration of a Money Laundering or

Financing of Terrorism or Financing of Unlawful Organizations crime in view of causing harm to another

person shall be sentenced to the maximum sanction for the crime of false notification.

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Article 18



Any person, who wilfully fails to disclose or to provide additional information upon request or who

wilfully conceals information that must be disclosed or who wilfully provide incorrect information in

violation of the Regulation specified in Article 6 of this Law, shall be sentenced to imprisonment and a

fine or either one of these two penalties.

Article 19

Whoever breaches any other provision hereof shall be sentenced to imprisonment or to a fine amounting

to one hundred thousand Dirhams at most and ten thousand Dirhams at least.


dated 26/10/2014.

Article 19 bis

1. The imposition of the penalties set forth in the present Law shall not prevent any greater

penalty specified by another law.

In all instances, a foreign national who is convicted of any of the crimes set forth in this Law must be

expelled from the State.

2. The provisions of this Law shall not affect the provisions of Federal Law No. 7 of 2014

on Combating Acts of Terrorism.

3. The Federal Supreme Court shall be solely competent to examine the crime of financing

of terrorism.

Article 20



The central bank, the Financial Intelligence Unit, the law enforcement authorities, financial institutions

and other financial, commercial and economical institutions, the members of their boards of directors,

their employees and duly licensed representatives shall not be involved in criminal, civil or administrative

liability which may result from the disclosure of required information or for breach of any restriction on

disclosure of information imposed by contract or by any legislative, regulatory or administrative

provision, if they report their suspicions in good faith and with no intention to incur damage to third

parties.

Chapter 4 International Cooperation

Article 21

The competent judicial authority, in accordance with a request by the judicial authority in another country

connected to the State by an approved convention, or on condition of reciprocity should the criminal act

be sanctioned in the State, shall order the tracking, freezing, imposing precautionary seizure on funds,

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returns or means resulting from a crime of Money Laundering or Financing of Terrorism or Financing of

Unlawful Organizations or used therein.

Article 22

Any provisions or judicial writ setting forth the confiscation of funds, returns, or means related to crimes

of Money Laundering or Financing of Terrorism or Financing of Unlawful Organizations issued by a

court or a competent judicial authority of another country connected to the State by an approved

convention may be recognized.

Chapter 5 General Provisions

Article 23



The Implementing Regulation shall be issued by the Council of Ministers, upon the suggestion of the

Minister, within a period of six months at most as of the date its enforcement.

Article 24

Any provision conflicting with or contradicting the provisions hereof shall be abrogated.

Article 25

This Law shall be published in the Official Gazette and shall come into force as of the date of its

promulgation.

Promulgated by us in Abu Dhabi On 8 Dhu Al-Qi’dah 1422 H. Corresponding to 22/01/2002

Zayed Bin Sultan Al Nahyan

President of the United Arab Emirates State

This Federal Law has been published in the Official Gazette, issue No. 376.

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PART II: AML CABINET RESOLUTION

Please note that in the event of any inconsistency the Arabic version of the AML Cabinet Resolution will

prevail and that no guarantee is given as to the accuracy of the below translation.

Penalties and Criminal Measures

38

Cabinet Decision No. 38/2014

Issued on 05/11/2014

Corresponding to 12 Muharram 1436 H

On the Implementing Regulation of Federal Law No 4/2002 on Anti-Money Laundering and

Combating the Financing of Terrorism

The Cabinet,

After perusing the Constitution,

Federal Law No. 1/1972 on Competencies of the Ministries and Powers of the Ministers and its

amendments;

Federal Law No. 4/2002 on combating Money Laundering and Financing of Terrorism, and

amending laws thereof; and

Based on the Minister of Finance presentation and approval of the Cabinet,

Decides the following:

Article 1–Definitions

In application of the provisions of this Law, the following terms and expressions shall have the

meanings assigned against each, unless the context requires otherwise:

State: The United Arab Emirates

Law: Federal Law No. 4/2002 on Anti-Money Laundering & Combating the Financing of

Terrorism, and amendments thereof.

Regulation: The Implementing Regulation to the Law

Minister: The Minister of Finance

Central Bank: The Central Bank of the United Arab Emirates

Authority: The Securities and Commodities Authority

Governor: The Governor of the Central Bank

Committee: The National Committee on Anti-Money Laundering and Combating Financing of

Terrorism

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Property: All kinds of Assets, whether tangible or intangible, movable or immovable, including

national and foreign currencies, and the legal documents or instruments evidencing title to those assets or

any rights related thereto, whatever their form, including electronic or digital.

Money Laundering: Any act stated in Article (2) herein.

Financing of Terrorism: To provide, collect, ensure or transfer property, by any means, directly

or indirectly, to any association, authority, organization, centre, group, gang or any person to which apply

the provisions of Federal Law No. 7/2014 on Combating Terrorist Crimes, whether such property is from

licit or illicit source, is to be used, in full or in part, to carry out terrorist acts or not, and whether such

terrorist acts have taken place or not.

Financing of Unlawful Organizations: Any physical or legal act intended to provide property

to an unlawful organization, or to any of its activities or members.

Proceeds: Any property that is directly or indirectly the outcome of the commission of any

Felony or misdemeanour.

Suspicious Transactions: Transactions involving property which are reasonably suspected to be

proceeds of any Felony or misdemeanour related to the financing of terrorism or unlawful organizations,

whether such transactions have been or are being executed.

Freezing or sequestration: Temporary prohibition of the transfer, conversion, disposition,

movement or exchange of property by an Order issued by the competent authority.

Confiscation: Permanent deprivation of personal property by Order of a competent court.

Instrumentalities: Any item used or intended for use in any way to commit any Felony or

misdemeanour.

Financial Institutions: Any bank, financing company, money exchange establishment, financial

and monetary intermediary or any other establishment, whether publicly or privately owned, licensed by

the Central Bank or the Authority.

Other Financial, Commercial and Economic Institutions: Institutions that are licensed and

supervised by parties other than the Central Bank and the Authority, including specific non-financial

professions and activities, such as real estate brokers, traders of jewellery, precious metals and precious

stones, attorneys at law, legal consultants, public notaries and accountants.

Unit: The Financial Intelligence Unit for Anti-Money Laundering and Suspicious Cases,

established within the Central Bank by Law.

Customer: Any physical or legal person which financial institutions or other financial,

commercial and economic institutions are dealing with, for account opening or service delivery for

example.

Supervisory Authorities: Federal and local authorities entrusted, by virtue of different Laws and

Regulations, with the task of supervising and licensing financial institutions or other financial,

commercial and economic institutions.

Law Enforcement Authorities: Federal and local authorities entrusted, by virtue of their

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legislations in force, with the tasks of combating crimes, search and investigation, and evidence collection

in all crimes, including money laundering offences and the financing of terrorism and unlawful

organizations.

Bearer negotiable instruments: Monetary instruments whether in bearer form such as traveller

cheques, or cheques, promissory notes and money orders.

Politically exposed persons: Physical persons who are or have been entrusted with prominent

public functions in a foreign country, such as Presidents or Prime Ministers, high- level politicians and

governmental personalities, senior judicial or military officers, senior Chief Executive Officers of state-

owned companies, political party leaders, and individuals who are or have been entrusted with prominent

public functions at international organizations.

Beneficial owner: The physical person who exercises an effective control over a customer or the

person on whose behalf a transaction is being conducted. It also includes the person who exercises

effective control over a legal person or arrangement.

Article 2–Money Laundering Offence

1. Any person who knows that property is the proceeds of an offence or a felony and

intentionally commits any of the following acts shall be considered a perpetrator of the money laundering

offence:

a. The conversion, transfer, deposit, storage, exploitation, exchange or management

of proceeds, with the intent to conceal or disguise the illicit source of such proceeds.

b. The concealment or disguise of the true nature, source, location, disposition,

movement, ownership of or rights related to proceeds.

c. The acquisition, possession or use of such proceeds.

2. The money laundering offence shall be considered as an independent offence.

Condemning the perpetrator of a predicate offence does not prevent convicting him of money laundering.

3. To be convicted of a predicate offence is not a condition to prove the illicit source of

proceeds. Predicate offences include acts committed in another country, which are considered an offence

in this country and would constitute a predicate offence if committed in the State.

Article 3–Liability of financial institutions or other financial, commercial and economic institutions

The financial institutions or other financial, commercial and economic institutions shall comply

with the following:

a. Execute the provisions of the Law, this Implementing Regulation, any rule or

instruction issued by the Central Bank or any supervisory authority, as well as any rule related to

combating money-laundering and the financing of terrorism and unlawful organizations in the

State.

b. Establish necessary rules and procedures to apply the provisions of the Law and

this Implementing Regulations, in compliance with the nature of their activities.

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Article 4–Compliance of financial institutions or other financial, commercial and economic

institutions


with the following:

a. Set a special system to identify customers, legal centres and beneficial owners,

and any modification with regard thereto.

b. Take prudential measures on a permanent basis; fill the forms accredited by

supervisory authorities, and make sure to keep a copy of all following documents, information

and data:

1. For a physical person:

a. His name as per his identity card or passport, his nationality, residence, country

of origin, name and address of employer.

b. A true copy of his identity card or a valid passport; verification of the legal centre

concerning the foreign workers in the State; obtaining senior management approval in case the

customer or the beneficial owner is one of the politically exposed persons or any of their family

members or close associates.

2. For a legal person:

a. Its legal form, name, country of origin, activities, address, legal representative

and power of attorney, names and addresses of associates and shareholders which own more than

5% each of share capital; take all measures stated in paragraph (1) herein in case the customer or

the beneficial owner is one of the politically exposed persons or any of their family members or

close associates.

b. A copy of its statute and a valid commercial or professional license accredited by

the Ministry of Economy, the local licensing authorities, the free zone authorities, the Ministry of

Labour, or the Ministry of Social Affairs in case of associations allowed to open bank accounts,

all depending on circumstances.

Article 5-Additional compliance of financial institutions or other financial, commercial and

economic institutions


with the following:

a. Not to deal, in any way, with shell banks, whether to open bank accounts in their

names, or accept funds or deposits from them.

b. Not to open bank accounts using pseudonyms, fictitious names or numbered

accounts without accountholders name.

c. Verify the origin of the wealth of politically exposed persons or any of their

family members or close associates, and constantly supervise their transactions.

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d. Regularly and periodically update all information and data related to customers’

identity.

Article 6–Storing records, files, documents, and correspondences

The financial institutions or other financial, commercial and economic institutions shall store all

records, files, documents, correspondences and forms set by the Committee, Central Bank and

supervisory authorities, for a period not exceeding five (5) years as of account closure date for customers

with accounts at these institutions, or the date customers with no accounts stopped dealing with aforesaid

institutions, or the date the supervisory authorities completed their inspection or investigation, or the date

of issuance of a final and conclusive judgment by competent judicial authorities, all depending on

circumstances.

Article 7–Notifying the Unit of Suspicious Transactions

The financial institutions or other financial, commercial and economic institutions shall notify the

Unit of transactions suspected to involve money laundering or the financing of terrorism or unlawful

organizations, by means of the suspicious transactions report form set by the Committee.

Article 8–Appointing a Compliance Officer and Determining his Tasks

The financial institutions or other financial, commercial and economic institutions shall appoint a

Compliance Officer as per the rules set forth by the Central Bank and supervisory authorities, and allow

him to work in total independence to perform, under their responsibility, the following tasks:

1. Detect money laundering transactions and the financing of terrorism and unlawful

organizations.

2. Peruse files; receive, examine and study data on suspicious transactions; and decide to

notify the Unit or store such data, stating the causes thereof in total confidentiality.

3. Review rules and procedures related to combating money laundering and the financing of

terrorism and unlawful organizations, and ensure compliance of each institution with aforesaid rules and

procedures; propose necessary update and development thereof; draft and submit mid-yearly reports to

senior management, and send a copy thereof to the Unit enclosed with senior management remarks and

decisions.

4. Prepare and execute, in coordination with the Unit, training programs and plans to

instruct institutions employees on money laundering and the financing of terrorism and unlawful

organizations, and the means of combating aforesaid.

5. Collaborate with the Unit, provide it with all requested data, and allow its employees to

peruse necessary files and documents to perform its competencies.

Article 9–Preparing training programs and workshops for employees

The financial institutions or other financial, commercial and economic institutions shall prepare

training and capacity building programs and workshops for Compliance Officers and other employees

working in the field of combating money laundering and the financing of terrorism and unlawful

organizations.

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Article 10–Scope of application of Article 4 measures on branches and companies operating outside

the State

The measures stipulated in Article 4 herein shall apply on branches and companies operating

outside the State, which are affiliated to financial institutions or other financial, commercial and economic

institutions, in case aforesaid measures are not applied at all or are applied in a lesser way in the countries

where affiliated branches and companies are operating.

Article 11-The National Committee on Anti-Money Laundering and Combating Financing of

Terrorism

The Minister shall form the Committee chaired by the Governor and name its members based on

the nominations of the parties specified in the Law and the ones added by the Committee Chairman.

Article 12–Committee Meetings and Decisions

1. The Committee shall elect its Vice-chairman among its members during the first meeting.

2. The Committee shall convene at the invitation of its Chairman once at least every three

months or whenever the need arises.

3. A meeting is only valid when the majority of the Committee members are present,

including the Chairman or the Vice-chairman.

4. Decisions shall be taken by a two-thirds majority vote, of the parties represented in the

meeting of the Committee.

5. Committee members may attend Committee meetings through visual electronic media.

6. If any Committee member fails to attend three meetings in a row without any excuse

accepted by the Committee, the Chairman shall submit its recommendation to the Minister to take

appropriate decision.

7. The Committee may invite any experienced and competent persons it deems appropriate

to attend its meetings, provided such person shall have no right to vote during its meetings.

Article 13-Subsidiary Committees

The Committee may form subsidiary committees among its members to study any subject within

its competencies, and it may request the help of any experienced and competent persons it deems

appropriate.

Article 14-Identifying, assessing and confronting the risks of money laundering and the financing of

terrorism

1. The Committee may apply the risk-based approach to identify and assess the risks of

money laundering and the financing of terrorism and unlawful organizations.

2. The Committee shall propose national policies to confront money laundering and combat

the financing of terrorism and unlawful organizations, taking into account identified risks.

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3. Supervisory authorities shall, in coordination with the Unit, deal with the risks identified

by the Committee.

Article 15-Technical and Administrative support to Committee

The Unit shall provide all technical and administrative support to Committee, and the Unit

Chairman shall be the Committee rapporteur.

Article 16-The Unit Competencies

The Unit shall perform following tasks:

1. Receive, study, analyze, record and store in the Unit database all suspicious transactions

reports related to money laundering and the financing of terrorism and unlawful organizations, sent by

financial institutions or other financial, commercial and economic institutions.

2. Request, when necessary, additional information regarding the suspicious transactions

reports related to money laundering and the financing of terrorism and unlawful organizations, sent by

financial institutions or other financial, commercial and economic institutions, and law enforcement

authorities.

3. Request, when necessary, information, data or reports from any association or non- profit

organization, in case it suspects money laundering activities or financing of terrorism or unlawful

organizations, or in case it receives reports or any information about aforesaid associations or

organizations.

4. Collaborate and cooperate with the Central Bank and supervisory authorities to ensure

financial institutions or other financial, commercial and economic institutions are complying with the

procedures set forth to combat money laundering and the financing of terrorism and unlawful

organizations.

5. Collaborate with judicial authorities and law enforcement authorities on money

laundering transactions and the financing of terrorism and unlawful organizations; inform competent

Public Prosecution of the investigation and inspection results and of any breach to the Law and to this

Implementing Regulation; and provide sufficient evidence to take necessary action in regard thereto.

6. Collaborate periodically with the Committee, Central Bank and supervisory authorities to

draft and amend the suspicious transactions report form to be used by the financial institutions or other

financial, commercial and economic institutions.

7. Create and periodically update a database or a special register to record and store all

cases submitted to the Unit regarding money laundering transactions and the financing of terrorism and

unlawful organizations; and set necessary rules and regulations to safeguard the confidentiality of such

information and prevent others from perusing or disclosing them, unless with the written approval of the

Unit Chairman or whoever replaces him in his absence.

8. Propose a statute for the Unit, to be adopted by the Unit Chairman.

9. Offer technical opinion on suspicious transactions reports.

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10. Exchange information regarding suspicious transactions with its counterparts in other

countries, international organizations, authorities and committees, in compliance with international

agreements to which the State is a party, or on the basis of reciprocity. Such information shall only be

used for the purpose of combating money laundering and the financing of terrorism and unlawful

organizations.

11. Prepare and execute training programs and sessions to the Unit employees and any other

party, and offer them technical assistance whether inside or outside the State.

12. Prepare studies, researches and statistics related to money laundering transactions and the

financing of terrorism and unlawful organizations, and stay informed of any study, research or statistics

undertaken on both local and international levels.

Article 17–Supervisory Authorities Competencies

Supervisory authorities have, in coordination with the Unit, competence to:

1. set the rules, regulations, forms and procedures aiming to combat money laundering

transactions and the financing of terrorism and unlawful organizations, which financial institutions or

other financial, commercial and economic institutions shall comply with to identify customers,

beneficiary owners and legal centres thereof; store files and submit suspicious transactions reports;

2. set necessary procedures and rules to ensure compliance of financial institutions or other

financial, commercial and economic institutions that are under its control, with the provisions of the Law,

this Implementing Regulation and any other legislation pertaining to combating money laundering and the

financing of terrorism and unlawful organizations in the State; and

3. organize programs and awareness campaigns about combating money laundering and the

financing of terrorism and unlawful organizations, each within its competencies.

Article 18–Property Freezing

1. The Central Bank may order to freeze at financial institutions and for a period not

exceeding seven (7) working days, property suspected to be related to money laundering and the

financing of terrorism and unlawful organizations, and shall notify the competent Public Prosecutor of

aforesaid order.

2. The financial institution shall, at the request of the Unit, notify the owner of frozen

property of the freezing order and request him to provide necessary evidence of the licit source of such

property. At the end of the freezing period stated in paragraph (1) herein, and in the absence of any

reservation submitted by the competent Public Prosecution as to the property, or in case of sequestration

order by the competent court, the Central Bank shall issue a decision cancelling thereby the freezing

order.

Article 19–Property Freezing and Sequestration Procedures

1. The Unit shall handle the study and analysis of suspicious transactions reports as soon as

submitted by financial institutions or other financial, commercial and economic institutions. In the event

of any transaction including property derived from suspicious source conducted in a financial institution,

the Unit shall recommend to the Governor to freeze aforesaid property.

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2. The Unit shall notify the competent Public Prosecution in case of issuance of a freezing

order.

3. The Unit shall coordinate with supervisory authorities and law enforcement authorities to

take appropriate action with regard to property mentioned in suspicious transactions reports submitted by

financial institutions or other financial, commercial and economic institutions.

4. The Unit shall notify financial institutions or other financial, commercial and economic

institutions concerned by the procedures and actions taken against suspicious transactions.

Article 20–Law Enforcement Authorities

1. Law enforcement authorities shall fill the forms set by the Unit when requesting

information on suspicious transactions reports, recorded in the Unit database or from the Financial

Information Units in other countries.

2. Law enforcement authorities shall obtain the authorization of a competent judicial

authority when they wish to obtain from any financial institution details on the accounts or money

transfers of a person accused of the commission of any of the offences stated in the Law.

Article 21–Disclosure System

Competent customs shall apply the Disclosure system issued by the Central Bank regarding all

currencies, bearer negotiable instruments, precious metals or valuable stones that go into or out of the

State.

Article 22 –Confidentiality of Information

All staff members of authorities subject to the provisions of this Law shall not disclose any

information on suspicious transactions related to money laundering or the financing of terrorism or

unlawful organizations, except to the extent which is necessary for investigation purposes or legal actions

or lawsuits for breach of provisions of the Law. In all cases, customer shall not be contacted directly or

indirectly to notify him of any procedure against him, unless by written request of concerned supervisory

authority.

Article 23–Obligation to provide requested information and data

Non-disclosure of professional secrets shall not constitute an excuse for not providing

information and data when requested in compliance with the provisions of the Law, this Implementing

Regulation and decisions issued in execution thereof.

Article 24–Abrogation of provisions in contradiction or conflict

Any provision contrary to or inconsistent with the provisions of this Decision shall be abrogated

Article 25-Publication and Entry into Force

This Decision shall be published in the Official Gazette, and shall enter into force as of its date of

publication.

31

Issued on 12 Muharram 1436 H.

Corresponding to November 5, 2014

Mohammed bin Rashid Al Maktoum

Prime Minister

The present Decision was published in the Official Gazette no. 572 page 83.