UAE Imposes Strict Penalties for AML and CFT Failings

The UAE is set to be removed from the FATF’s Gray List in the upcoming year as it substantially improves its efforts to combat anti-money laundering and terrorist financing in the region. 

The United Arab Emirates (UAE) has imposed strict compliance measures on individuals and companies in the region, aiming to meet FATF’s obligations. The firms and individuals were advised to strengthen their AML and CFT measures to mitigate financial crimes while avoiding potential penalties and imprisonment. 

As per records, the UAE took these steps to get removed from the Financial Action Task Force’s (FATF) Gray List. With its new laws and regulations for countering money laundering and terrorist financing, the UAE is expecting to get removed from the Gray List in 2024. The UAE Central Bank and other regulatory authorities have penalized many entities for not adhering to AML and CFT laws. 

Alexander Kukuev, manager partner and advocate at Uppercase Legal Advisory, said, “Violators could face up to a Dh5 million penalty and lifetime imprisonment, while the minimum imprisonment period is 10 years.”

While the economy of the United Arab Emirates is growing rapidly, new companies are registered daily. Alexander Kukuev pointed out another major issue and said, “The UAE will focus more on AML, and I strongly believe big firms and SMEs will have to think about it as the number one issue when they start their businesses. More and more free zones are also getting involved, so they will check whether the company registered with them complies with the rules when they renew the licenses. If they fail to comply, they may not be given a commercial license.” 

These new AML/CFT rules and regulations will allow the UAE to improve its reputation in the global financial ecosystem by getting removed from the FATF’s Gray List. However, it will significantly impact its economy, which relies greatly on foreign businesses. As per Abdulla Baqer, regional director of the Dubai Chamber, these efforts not only promote Dubai but also educate foreign companies about the local laws and policies and create awareness among the local companies.

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