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Laundering Laws Breach

200 UAE Law Firms Suspended from Anti Money Laundering Laws Breach

In a recent announcement released by authorities, over 200 law firms with licenses to operate in the UAE have been ordered to cease operations for an entire month due to violations with the prescribed procedures set by UAE Cabinet in combating money laundering. According to the UAE Ministry of Justice, it will also take legal action against all lawyers that are proven to be non-compliant. 

Authorities noted that penalties against all law firms that violate include cancellation of their professional licenses, suspension, and imposing of hefty fines that range anywhere from Dhs 50,000 to 5 Million. 

Law firms in the country are also urged in taking necessary measures that make sure any anti laundering obligation is addressed, including all anti-terrorism financing policies. The UAE Ministry of Justice is asking law firms in taking legal action that are against those who violate Federal Decree (20) of 2018 on money laundering and other relevant executive policies and ministerial orders part of the initiatives of the UAE in addressing all risks which come with financial crimes. Suspension of operations for violating law firms will be lifted as soon as lawyers who are in charge of legal management offices provide sufficient proof that they’ve carried out processes that fulfill their obligations as per UAE Ministerial Resolution (533) of 2019 in relation to combatting money laundering. 

Authorities have also highlighted the role that’s played by UAE law firms in the goal of eliminating the possibility of money laundering within the UAE’s jurisdiction as well as the need for UAE-based lawyers in shouldering responsibility on the fight for the crime. Lawyers are also urged in identifying risks as they are handling their clients, maintaining proper records, as well as reporting any suspicious transaction. 

 UAE’s progress to combat money laundering 

The country has already rolled out a lot of initiatives to combat terrorism financing and money laundering. Authorities have implemented a national plan in curbing money laundering and financing of terrorism within its borders as per the statement that was issued by the UAE Central Bank. 

In order to create awareness regarding financial crimes which threaten a country’s stability and security, the local authorities have developed platforms that assist all stakeholders and strategic partners in fully complying with reporting measures that have adopted international standards. 

 A new platform that utilizes technology in detecting financial crimes was developed while building the nation’s capacity will strengthen its ability in implementing financial sanctions in relation to suppression and prevention of terrorist financing. 

UAE is home to myriads of local, national, and international banks and now has strict regulations in dealing with terrorism financing and money laundering. Last year, the United Arab Emirates became among the first countries that are implementing reporting platforms that help curb organized crime. Almost a thousand entities which include insurance companies, money exchange centers, and banks become part of platforms that help regulators prevent all illicit financial activities.  

For assistance in full compliance with all applicable rules and regulations to your organization in UAE, contact us here in HHS Lawyers today! 

M. Al Khairy, LL.B. is a Senior Partner of HHS Lawyers in UAE. Practicing law for almost a decade, he has in-depth knowledge on UAE legislation with particular expertise on legal drafting, contract drafting, labor disputes, family law, and regulatory compliance for business organizations. Al Khairy also provides counsel on legal rights and obligations in the UAE to clients, including individuals and businesses subject to investigation or prosecution under Criminal Law by major regulators. Read more