The UAE clamps down on money laundering with amendments to AML laws and its national strategy

The National Strategy follows the Financial Action Task Force’s (FATF) decision to delist the UAE from its ‘grey list’ in February 2024.

Amendments to the AML law

While the full details of the National Strategy are yet to be announced, the UAE has taken some steps to implement it. Amendments to the existing AML law¹ were introduced in August 2024² (the New AML Law). Key features include:

• A new National Committee for Combating Money Laundering and the Financing of Terrorism and Illegal Organisations (the National Committee). A ‘General Secretariat’ function of the National Committee is likely to handle the day-to-day operations of the National Committee and be responsible for overseeing the implementation of the National Strategy. This National Committee replaces The Executive Office of the Anti-Money Laundering and Countering the Financing of Terrorism.
• The restructuring of the Higher Committee, into the Supreme Committee for Supervising the National Strategy to Combat Money Laundering and Terrorism Financing (the Supreme Committee).

The New AML Law helps deliver some of the key objectives of the National Strategy:

• Enhancing national and international coordination in order to improve information exchange between regulatory bodies, e.g. the New AML Law places responsibility on the National Committee to ensure it coordinates with ‘Concerned Authorities’ (the UAE’s authorities concerned with the implementation of the New AML Law) to identify high-risk countries and countries with weaknesses in their AML/CTF framework to enable the UAE to develop countermeasures against such risk.
• Building partnerships between the UAE’s regulatory authorities and international counterparts to better ensure effective supervision of market participants’ AML/CTF obligations within the private sector.
• Strengthening the detection and investigation of financial crime.

These priorities are consistent with the policy approach that the UAE government has recently taken in respect to AML regulation.

The Supreme Committee

The Supreme Committee’s role includes:

• Monitoring and evaluating the effectiveness of the strategies and procedures adopted by the National Committee.
• Coordinating with and directing the ‘Concerned Authorities’ to provide support to the National Committee in performing its function. It has been given the power to issue decisions and supervise and monitor the implementation of these decisions.
• Supervising the FATF’s mutual evaluation of the UAE to measure its compliance with international standards.

Under the New AML Law, the Supreme Committee can also provide input on the allocation of financial resources to federal entities with responsibility for the implementation of the National Strategy.

Impact of the New AML Law

The New AML Law brings the various committees responsible for the regulation of AML/CTF under the direct supervision and control of the UAE Presidential Court and the UAE Cabinet. This underscores the continued priority that is being placed by the UAE over this policy issue.

Nonetheless, at this stage the announcements made in respect of the National Strategy and the enactment of the New AML Law are largely a statement of intent, with the 11 strategic priorities relating to the National Strategy foreshadowed by the UAE government but not yet announced.

In anticipation of the announcement of the details of the National Strategy, we recommend that UAE businesses review against existing rules, their AML policies, procedures and controls; particularly financial services providers and designated non-financial businesses and professions (such as insolvency professionals, real estate agents and traders in precious metals) who are subject to higher levels of regulation and scrutiny.

In particular, traders in precious metals should pay particular attention to their AML risk and compliance in light of the impending National Strategy and the increased enforcement activity recently undertaken by UAE regulators against this industry. 32 UAE gold refineries had their licenses suspended between July and October 2024 for failure to comply with AML legislation, including failing to have sufficient systems and controls in place and failing to make suspicious activity reports.

Footnotes

1 Federal Decree Law No. 20 of 2018.
2 via Federal Decree Law No. 7 of 2024.