Money Laundering or Hawala in UAE, Laws & Punishments

How are Hawala and Money Laundering defined under UAE Laws?

According to the UAE’s legal and regulatory framework, Hawala and Money Laundering are defined as follows:

Hawala: The UAE Central Bank defines Hawala as an informal money transfer system that operates outside of conventional banking channels. It involves the transfer of funds from one location to another through service providers known as “hawaladars” without any physical movement of currency.

Money Laundering: Money Laundering is a criminal offense under UAE Federal Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism. It is defined as the process of concealing or disguising the true nature, source, location, disposition, movement, or ownership of funds or assets derived from illegal activities.

Ihe atụ ndị a na-atụkarị gụnyere: structuring/smurfing, shell companies, real estate transactions, trade-based laundering, casino operations, cryptocurrency transactions, bulk cash smuggling, and misusing Hawala networks.

The UAE takes a strong stance against these activities, and the legal consequences for individuals or entities involved in Hawala or Money Laundering can be severe. It is crucial to comply with the UAE’s anti-money laundering regulations and conduct financial transactions through legitimate and authorized channels.

When is Hawala Legal or Illegal in the UAE?

Hawala, the informal money transfer system, is not inherently illegal in the UAE. However, it is an unregulated and informal channel, which can potentially be exploited for illicit activities, including money laundering and financing of terrorism. The legality of Hawala transactions in the UAE depends on the source of funds and the intended purpose.

If Hawala is used to transfer funds derived from legal sources and for legitimate purposes, it may be considered legal. However, if it is utilized to transfer funds obtained through illegal means or for unlawful activities, such as money laundering, terrorism financing, or tax evasion, it becomes illegal under UAE laws. Authorities closely monitor Hawala networks to ensure compliance with anti-money laundering and counter-terrorism financing regulations.

It’s important to note that while Hawala itself is not illegal, the UAE has strict regulations in place to combat the misuse of informal money transfer systems for illicit purposes. Individuals and businesses are advised to exercise caution and conduct financial transactions through licensed and regulated channels to avoid potential legal consequences.

Types of Money Laundering cases in the UAE

The UAE has witnessed various types of money laundering cases involving individuals and entities engaged in illicit activities. Here are some common types of money laundering cases observed in the UAE:

1. Real Estate-Related Money Laundering: This involves the purchase and sale of properties using funds derived from illegal sources, such as drug trafficking, fraud, or corruption.
2. Trade-Based Money Laundering: This type of laundering involves the misrepresentation of the price, quantity, or quality of goods in import/export transactions to move illicit funds across borders.
3. Bulk Cash Smuggling: This involves the physical transportation of large amounts of cash across borders, often concealed in vehicles, luggage, or other means, to evade reporting requirements and disguise the source of funds.
4. Shell Company-based Money Laundering: In this type of case, individuals or organizations establish fake or shell companies to disguise the true ownership and source of funds, and provide a legitimate-appearing cover for illicit transactions.
5. Misuse of Informal Value Transfer Systems (IVTS) like Hawala: Certain cases involve the exploitation of informal money transfer systems like Hawala to move illicit funds globally, taking advantage of the lack of a traditional financial trail.
6. Cryptocurrency-based Money Laundering: With the increasing use of cryptocurrencies, some cases involve the use of digital assets to conceal the movement and origin of illegal funds, exploiting the anonymity and decentralized nature of these transactions.
7. Laundering through Casinos and Gaming Establishments: In some instances, casinos and gaming establishments have been used to exchange large amounts of cash for chips or other monetary instruments, effectively disguising the source of the funds.

It’s worth noting that money laundering schemes can be complex and evolve over time, often involving a combination of different methods and channels. Effective anti-money laundering measures, robust regulatory frameworks, and international cooperation are crucial in combating these criminal activities in the UAE.

What is the Anti Money Laundering Law in UAE?

The Anti-Money Laundering Law in the UAE is governed by Federal Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism. This comprehensive law defines and criminalizes money laundering activities, outlines strict measures to combat terrorism financing, and establishes a robust regulatory framework.

The key aspects of the Anti-Money Laundering Law in the UAE include:

1. Definition of Money Laundering: Clearly defines money laundering as concealing or disguising funds derived from illegal activities.
2. Reporting Obligations: Requires financial institutions and businesses to implement AML/CFT measures, including customer due diligence, transaction monitoring, and reporting suspicious activities.
3. Penalties and Sanctions: Imposes severe penalties, including fines and imprisonment, for non-compliance.
4. Competent Authorities: Mandates the establishment of authorities like the Financial Intelligence Unit (FIU) to oversee AML/CFT efforts.
5. Nkwado Mba Nile: Facilitates cooperation and information sharing with other countries in the fight against money laundering and terrorism financing.

What are the Maximum Penalties for Money Laundering Convictions in the UAE?

The UAE’s Anti-Money Laundering Law imposes severe penalties for individuals and entities convicted of money laundering offenses. The maximum penalties for money laundering convictions in the UAE are as follows:

1. Mkpọrọ:
   • For individuals: Up to 10 years in prison.
   • For managers or representatives of legal entities: Up to 15 years in prison.
2. Nra:
   • For individuals: A fine not exceeding AED 5 million (approximately $1.36 million).
   • For legal entities: A fine not exceeding AED 50 million (approximately $13.6 million).

In addition to these penalties, the convicted individuals or entities may also face:

• Confiscation of funds, properties, or instrumentalities related to the money laundering offense.
• Dissolution or temporary or permanent closure of the legal entity involved in the offense.
• Publication of the court’s judgment in two local daily newspapers at the expense of the convicted party.

It’s important to note that these penalties represent the maximum punishments prescribed by the law. The actual sentence may vary depending on the specific circumstances of the case, the severity of the offense, and other mitigating or aggravating factors.

The UAE takes a strict stance against money laundering activities, and these severe penalties reflect the country’s commitment to deterring and combating financial crimes within its jurisdiction.

Are there any Special Provisions for Money Laundering linked to Organized Crime or Terrorism Financing?

Yes, the UAE’s Anti-Money Laundering Law includes special provisions for money laundering offenses linked to organized crime or terrorism financing:

1. Harsher Penalties for Organized Crime: If a money laundering offense is committed within the framework of an organized criminal group, the maximum imprisonment penalty shall be increased by a specified proportion.
2. Criminalizing Terrorism Financing: The law criminalizes the financing of terrorism and terrorist organizations. Any person who willfully collects, transfers, or provides funds or property with the intention of using them for terrorist activities can face lengthy imprisonment and substantial fines.
3. Mmekọrịta mba ụwa: The law facilitates international cooperation and information sharing with other countries and jurisdictions in combating money laundering, organized crime, and terrorism financing. This includes provisions for extradition and mutual legal assistance.
4. Targeted Financial Sanctions: The UAE has implemented targeted financial sanctions against individuals and entities designated by the United Nations Security Council or other relevant international organizations as being involved in terrorism financing or associated with terrorist organizations.

These special provisions underscore the UAE’s commitment to combating the financing of terrorism and organized crime, which pose significant threats to national and global security. The severe penalties and enhanced international cooperation measures aim to disrupt and dismantle these illegal activities and their financial networks.

Key AML Compliance Requirements for Businesses in UAE

The UAE’s Anti-Money Laundering Law imposes several compliance requirements on businesses operating within the country. Here are the key AML compliance requirements for businesses in the UAE:

1. registration: Mandatory registration with goAML portal for FIs and DNFBPs.
2. AML nnabata: Appoint a dedicated officer to oversee AML program.
3. AML Program: Establish comprehensive policies and procedures for KYC, transaction monitoring, risk management, and reporting.
4. Ụzọ dabere n'ihe ize ndụ: Tailor AML program to business size, nature, and inherent risks.
5. Nleba anya nke ndị ahịa (CDD): Conduct thorough KYC checks, including identity verification and beneficial ownership identification.
6. Nleba anya nke ọma (EDD): Apply additional measures for higher-risk customers like PEPs.
7. Nyochaa azụmahịa: Monitor transactions for suspicious activities.
8. Suspicious Activity Reporting: Report suspicious transactions to Financial Intelligence Unit (FIU).
9. Idebe ndekọ: Maintain customer and transaction records for at least 5 years.
10. Ọzụzụ Ndị Ọrụ: Provide regular AML/CFT training to employees.
11. Nyocha nke nọọrọ onwe ya: Conduct regular audits of AML/CFT program.
12. Mmekọrịta ya na ndị ọchịchị: Cooperate with authorities and provide required information.

Failure to comply with these requirements can result in severe penalties, including fines, imprisonment, and potential revocation of licenses or business closure. Businesses operating in the UAE must prioritize AML compliance to mitigate risks and maintain the integrity of the financial system.

Kedu ihe bụ ọkọlọtọ uhie na AML?

Ọkọlọtọ na-acha uhie uhie na-ezo aka na ihe ngosi pụrụ iche nke na-egosi omume iwu na-akwadoghị nke chọrọ nyocha ọzọ. Ọkọlọtọ uhie AML nkịtị metụtara:

Omume ndị ahịa na-enyo enyo

• Nzuzo gbasara njirimara ma ọ bụ achọghị ịnye ozi
• Enweghị mmasị ịnye nkọwa gbasara ọdịdị na ebumnuche azụmahịa
• Mgbanwe na-adịkarị na enweghị nkọwa n'ịchọpụta ozi
• Mgbalị enyo enyo iji zere mkpa mkpesa

Azụmahịa nwere ihe egwu dị elu

• Ịkwụ ụgwọ ego dị ịrịba ama na-enweghị isi mmalite ego doro anya
• Azụmahịa na ụlọ ọrụ dị na ikike nwere nnukwu ihe egwu
• Usoro nkwekọrịta mgbagwoju anya na-ekpuchi ihe onwunwe bara uru
• Ogo na-adịghị mma ma ọ bụ ugboro ole maka profaịlụ ndị ahịa

Ọnọdụ pụrụiche

• Azụmahịa enweghị nkọwa ezi uche dị na ya / echiche akụ na ụba
• Ekwekọrịtaghị na mmemme ndị ahịa na-emebu
• Amaghị nkọwa nke azụmahịa emere n'aha mmadụ

Ọkọlọtọ uhie na UAE

UAE chere ihu kpọmkwem ihe ize ndụ mwepu ego site na mgbasa ozi ego dị elu, ịzụ ahịa ọla edo, azụmahịa ụlọ ahịa wdg. Ụfọdụ isi ọkọlọtọ uhie gụnyere:

Azụmahịa ego

• Nkwụnye ego, mgbanwe ma ọ bụ ndọrọ ego karịrị AED 55,000
• Ọtụtụ azụmahịa n'okpuru ọnụ ụzọ iji zere ịkọ akụkọ
• Ịzụta ngwa ego dị ka nlele ndị njem na-enweghị atụmatụ njem
• Ntinye aka na-enyo enyo na adịgboroja na UAE

Ego ahia ahia

• Ndị ahịa na-egosipụta obere nchegbu gbasara ịkwụ ụgwọ, kọmishọna, akwụkwọ azụmaahịa, wdg.
• Akụkọ ụgha nke nkọwa ngwa ahịa yana ụzọ mbupu
• Ọdịiche dị ịrịba ama na ọnụọgụ mbubata/ebupu ma ọ bụ ụkpụrụ

Ahịa ịre ụlọ

• Ire ego niile, ọkachasị site na mbufe waya sitere na ụlọ akụ mba ofesi
• Azụmahịa ya na ụlọ ọrụ iwu kwadoro enweghị ike ịchọpụta ikike ha nwere
• Ọnụ ahịa ịzụrụ ekwekọghị na akụkọ ntule
• Ịzụta ọnụ ahịa na ire n'etiti ụlọ ọrụ metụtara

Ọlaedo/ọla

• Ịzụta ihe ndị dị oke ọnụ ahịa na-agakarị maka ire ere
• Enweghị mmasị ịnye ihe akaebe sitere na ego
• Ịzụta/ahịa na-enweghị oke uru n'agbanyeghị ọkwa onye na-ere ahịa

Formlọ ọrụ ụlọ ọrụ

• Onye si na obodo nwere nnukwu ihe ize ndụ na-achọ ịmepụta ụlọ ọrụ mpaghara ngwa ngwa
• Mgbagwoju anya ma ọ bụ enweghị mmasị ikwurịta nkọwa nke ihe omume akwadoro
• Arịrịọ iji nyere aka zoo ụlọ nwe

Omume na nzaghachi nye ọkọlọtọ uhie

Ndị ọchụnta ego kwesịrị iwere ihe ezi uche dị na ya mgbe ha chọpụtara ọkọlọtọ uhie AML:

Nleba anya nke ọma (EDD)

Chịkọta ozi ndị ọzọ gbasara onye ahịa, isi mmalite ego, ụdị ihe omume wdg. Enwere ike inye ikike ọzọ akaebe nke ID n'agbanyeghị nnabata mbụ.

Nyochaa site n'aka onye ọrụ nnabata

Onye na-ahụ maka nnabata AML nke ụlọ ọrụ ahụ kwesịrị ịtụle ezi uche nke ọnọdụ ahụ wee chọpụta omume dabara adaba.

Akụkọ azụmahịa na-enyo enyo (STRs)

Ọ bụrụ na omume yiri enyo enyo n'agbanyeghị EDD, tinye STR na FIU n'ime ụbọchị 30. A na-achọrọ STR n'agbanyeghị uru azụmahịa ọ bụla ma ọ bụrụ na a ma ụma ma ọ bụ nke ezi uche na-enyo enyo na mpụ ego. Ata ntaramahụhụ maka enweghị mkpesa.

Omume dabere n'ihe ize ndụ

Enwere ike ịtụle usoro dịka nleba anya emelitere, mmachi ọrụ ma ọ bụ ịpụ na mmekọrịta dabere n'okwu ndị akọwapụtara. Agbanyeghị, amachibidoro ịnyefe isiokwu gbasara ntinye akwụkwọ STR n'ụzọ iwu.

Mkpa nke nlekota oru na-aga n'ihu

Site na mwepu ego na-agbanwe agbanwe na usoro inye ego ndị na-eyi ọha egwu, nlekota azụmahịa na-aga n'ihu na ịmụrụ anya dị oke mkpa.

Nzọụkwụ dị ka:

• Nyochaa ọrụ/ngwaahịa ọhụrụ maka adịghị ike
• Na-emelite nhazi ihe egwu ndị ahịa
• Ntụle oge nke sistemu nlekota oru enyo
• Nyochaa azụmahịa megide profaịlụ ndị ahịa
• Tụnyere mmemme na ntọala ndị ọgbọ ma ọ bụ ụlọ ọrụ
• Nyochaa akpaaka nke ndepụta mmachi yana PEPs

Kwado njirimara ngwa ngwa nke ọkọlọtọ uhie tupu okwu mụbaa.

mmechi

Ịghọta ihe ndị na-egosi omume ezighi ezi dị mkpa maka ya nnabata AML na UAE. Ọkọlọtọ na-acha uhie uhie metụtara omume ndị ahịa na-adịghị ahụkebe, usoro ịzụ ahịa enyo enyo, nha azụmahịa na-ekwekọghị n'ọkwa ego, yana akara ndị ọzọ edepụtara ebe a kwesịrị ịkwado nyocha ọzọ.

Ọ bụ ezie na okwu ndị a kapịrị ọnụ na-ekpebi omume ndị kwesịrị ekwesị, iwepụ nchegbu n'aka nwere ike ịkpata ajọ ihe. E wezụga mkpata ego na aha ọma, ụkpụrụ AML siri ike nke UAE na-amanye ụgwọ obodo na ndị omempụ maka enweghị nnabata.

N'ihi ya, ọ dị mkpa ka ndị ụlọ ọrụ mejuputa njikwa zuru oke ma hụ na a zụrụ ndị ọrụ ka ha mata na zaghachi nke ọma na ihe ngosi ọkọlọtọ Red na AML.