Abu Dhabi: As “dirty money” gets deeper into the international banking system, the UAE is getting tougher with money launderers to strengthen the integrity of the country’s financial system and attract more foreign investments, according to members of the Federal National Council.

“The UAE is working tirelessly to follow the best international standards on combating money laundering and the financing of terrorism because of the seriousness of the menace,” said Mohammad Saeed Al Raqabani, FNC member from Fujairah, told Gulf News on Sunday.

Al Raqabani, also a member of a parliamentary panel, who has reviewed new rules to strengthen the fight against money laundering, said the UAE is fully cooperative in the global fight against money laundering and terrorist financing and these regulations are introduced with a view to strengthen safeguards and provide the governments with stronger tools to take action against financial crime.

Al Raqabani cited United Nations’ reports that put the amount of money being laundered globally in one year at up to five per cent of global GDP, or $2 trillion (Dh7.34 trillion).

The new rules are scheduled to be debated by the Council on April 30.

Penalty

Ali Eisa Al Nuaimi, a member from Ajman, said the new rules states that money launderers may face up to ten years in prison, a fine of up to Dh500,000 or both.

In the case of a business, the penalty is a fine ranging between Dh300,000 and Dh1 million. Also, the proceeds of any money-laundering activity are confiscated.

Al Nuaimi, also a rapporteur of the panel, added that protection will be provided to witnesses who testify against suspected criminals in organised crime including terrorism, money laundering, trafficking in drugs and humans and big fraud cases.

Board members, managers and staff of financial businesses who fail to report any money laundering transaction or terrorist financing will face a jail term of up to three years, a fine of up to Dh300,000 or both.

Al Nuaimi said tipping off money laundering suspects about any financial review or action taken by the authorities will be punished with a jail term of up to a year, a fine of up to Dh100,000 or both.

Failure to declare any controlled substance or amounts to be determined by the authorities will be punished with a jail term, a fine or both.

Once approved by the FNC, the rules will need to be endorsed into law by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan.

Report transactions

Money-laundering was criminalised in 2002 pursuant to Federal Law no 4 regarding Criminalisation of Money Laundering, applicable to individuals and financial and trading businesses operating in the UAE, including those in the free zones.

The UAE Central Bank requires that banks and financial entities report any transactions carried out by customers, which they suspect may be related to illegal dealings, and may consequently be related to money laundering or financing of terrorism.

These banks and financial institutions are also required to verify the identity of their clients at all times, to maintain documents relating to the identities of customers for at least five years and to take note of any transaction which is not compatible with the income of its owner, and which does not seem to have any reasonable economic cause or clear legal objective. Such requirements also include monitoring all letters of credit which are opened.

The Central Bank has the power to impose sanctions, including the power to revoke an institution’s licence, should a financial institution fail to comply with the rules.