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UAE to enact law against money laundering soon

posted on 06/11/2001: 669 views


A federal law criminalizing laundering of property derived from the unlawful activities which was passed recently by the Council of Ministers, will be enacted soon, UAE Central Bank official said. Speaking at the 36th Session of the Sub Commission on Illicit Drug Traffic and Related Matters in the Near and Middle East Conference, Manager of Banking Supervision and Examination Department at the Central Bank Abdulrahim Al Awadi said the law, which will punish money laundering offenders with p to seven years in jail would come into force soon. Awadi, however did not specify a date for the implementation of the law. Drafted early this year, the law is part of the UAE's incessant efforts to check the encroachment of ‘dirty' money into the country's financial system. It covers financial assets derive from narcotic and psychotropic substances, kidnapping, piracy, terrorism and offences committed in violation of the environment law. It also covers illicit dealing in the firearms and ammunition, bribery, breach of trust and other related offences stated in the international conventions to which the UAE is a signatory. "Whoever commits any of these crimes (mentioned above) shall be punished by imprisonment for a term not exceeding seven years, or by a fine not exceeding Dh300,000, or both, in addition to confiscation of proceeds derived from unlawful activities, "says Article 13 of the law. Awadi said that the high per capita income and the UAE's adoption of the market economy which includes, inter-alia, free financial and capital flow, suggest the existence of attraction points to money-launders. However, the severe penalties imposed on drug smugglers and drug abusers, have limited the phenomenon to a great extent. The Central Bank said Awadi, realised the probabilities of utilising banks and other financial institutions in the country in money-laundering activities. This consciousness led to a number of measures being adopted including requesting banks and other financial institutions, through circulars and instructions, to be extremely prudent in their daily operations and to report any suspicious transactions. The mechanism included requesting banks to identify the true identities of their clients and also report any accounts whose balance may not be compatible with the income of the owner, or which does not seem to have any reasonable economic cause or clear legal objective. As per its regulations and instructions to the banks and other financial institutions, the central banks do not allow banks to open secret, code or shadowy accounts. Procedures were intensified recently when the Central Bank issued Notice No. 1815/2001 dated 3/10/2001, requesting all money-changers to record details of persons or institutions that transfer and amount of Dh2,000 or its equivalent in to other currencies or more. Moneychangers are also requested to verify true identity by checking any of the original documents. Awadi said these procedures are in compliance with the international initiatives to counter money laundering. (The Gulf Today)

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