As part of the United Arab Emirates’ (“UAE”) efforts in combatting AntiMoney Laundering (“AML”) and Terrorist Financing (“TF”), UAE’s AML
Committee announces their adoption of a new regulatory framework
specifically for virtual assets.
Background
In mitigating the risk of money laundering and terrorist financing, the UAE has enacted the Federal
Decree No. 20 of 2018 on Anti-Money Laundering and Countering the Financing of Terrorism
(“AML Law”). Essentially, the AML Law established a legal framework in support of the relevant
authorities concerned in combatting money laundering and terrorist financing activities.
With technological advancement moving at a rapid pace, newer means of conducting money
laundering and terrorist financing have emerged. One being through the use of virtual assets.
The Financial Action Task Force (“FATF”) defines virtual assets as assets relating to blockchain,
crypto assets, virtual currencies, etc. A popular example is Bitcoin. Virtual assets have attracted
money launderers and terrorist financers because of their international reach, fast-paced nature
and, most importantly, its anonymity. Thus, the virtual asset industry has become a safe haven
for criminal and terrorist financial transactions
Regulatory Framework
In the eighth meeting recently held by the National Committee for Combatting Money Laundering
and Financing of Terrorism and Illegal Organisations (“Committee”), the Committee has
announced their implementation of a new regulatory framework specifically for virtual assets.
Following Recommendation No. 15 of the FATF International Standards on AML/CFT and by
coordinating with the Executive Office of Anti Money Laundering and Countering the Financing of
Terrorism, the new regulatory framework is a welcome development in further protecting investors
from risks of money laundering and terrorist financing.
The following were highlighted in the meeting:
- The Committee has assigned both the Central Bank of the UAE (“CBUAE”) and the Securities and Commodities Authority (“SCA”) with the managing of the implementation of the regulatory framework.
- The Committee implemented a national legislative framework providing the means and methods for detecting and seizing profits of money laundering crimes outside the UAE.
- The Committee adopted guidelines concerning the roles and procedures in enforcing targeted financial sanctions for local authorities and the public sector.
- In accordance with the Security Council Resolution No. 1267 (1999), 1989 (2011), and 1988 (2011), the Committee has approved a circular notice for Goods and Materials Subject to Import and Export Control to supervisory authorities and the Committee’s Executive Office to increase awareness on the enforcement of targeted financial sanctions.
Sustained Efforts
Along with the Committee’s adoption of the new regulatory framework, Dubai has also recently
set up a special court within the Court of First Instance and Court of Appeal specifically focused
on money laundering cases. This further emphasizes the UAE’s sustained efforts to counter
money laundering and terrorist financing and reinforce compliance with international anti-money
laundering standards.
Disclaimer
This article is for informational purposes only and shall not be considered as legal advice or
opinion.