The purpose of the new law is to stop Anti-money laundering and terror financing in the UAE. There are two units established under this law to practically control the money laundering in the UAE. Following are the main two committees created under the new law:
- Financial Information Unit;
- National Committee for anti-money laundering matters.
The degree aims to develop the local laws to meet the international standards on AML. The highlighting part of the law aims to require a declaration from anyone entering or leaving the country carrying cash or any valuables like precious stones must declare about the valuables to the authorities. The law further counters the financing of terrorist activities and some suspicious organizations. Generally, the financial institutions or their representatives engaged in the activities related to money laundering are liable in the UAE. The prosecutor's office and courts can take powerful legal action against an individual or an entity suspected to be engaging in Anti Money Laundering. The new law intended to strengthen the existing law and include new rules to combat against AML.
The UAE is one of the main financial hubs in the Middle East. There are many leading banks and financial institutions established in the country to assist companies and individuals with their financial transactions. Usually which amounts to millions and in some cases billions on corporate transactions. One such example is the establishment of Dubai International Financial Centre hosting leading financial companies around the world. However, as the country becomes more popular for financial activities, there are some companies and individuals use this as an opportunity for the Money Laundering. To counter this situation and identify money laundering using the corporate or financial institutions, The Central Bank has given the authorization to form an independent "Financial Information Unit" with the power to understand and investigate the reports of financial institutions. All the institutions are required to comply with the general standards of money laundering law of the country. Worldwide there are reported incidents of major banks or unit of a bank to be involved in the Money Laundering. The Financial information unit can investigate any suspicious financial activities of the non-financial institutions as well.
With this new law to decelerate the valuables and money when entering and leaving the country, activities of the individual related to money laundering expected to be reduced insubstantial amount. If a person carries money or possesses knowing that it has routed from an illegal activity and try to transfer or engage in any activity with that money, the law and enforcement can take against him. However, tracking down the source of money and financial valuables is a hard job in practice. Therefore, The Central Bank has given the authorization to form an independent "Financial Information Unit" with the power to understand and investigate the reports of financial institutions.
The regulators formed this committee intending to propose relevant procedures and policies with related to the matter. There is a number of committees formed by the regulators in various legal sectors in order to implement new procedures and policies related to the respective matters. Following this system, the new law has created a committee namely "National Committee to Counter Money Laundering" to set down procedures under this law. There are many new systematical technologies used in the UAE at present for the money laundering. One such example is the use of Bitcoin for money laundering and using cryptocurrency for the same. Therefore, the duty of this committee will be to tackle new methods of money laundering and set up suitable procedures and policies related to the matter.
With the establishment of both the committees under the Central Bank of the country, it is expected to be seen rapid improvement in the Money laundering law. Similarly, the action of law and enforcement against these activities can be expected of very strict with the principles and procedures laid down from these committees. The international monitory regulators on AML appreciate the new mechanism introduced from the UAE government to tackle money laundering in the country.
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