Financial Crime: Dev’t and Enforcement Trends in the UAE

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In the past year, the United Arab Emirates (UAE) has witnessed a number of important developments in the area of compliance and financial crime which will have a significant impact on the risk exposure of companies operating in the UAE for the foreseeable future.

These developments include the adoption of new laws and regulations that are in line with international best practice, a strengthening of the enforcement authority and resources available to regulators to pursue violators and to impose penalties and sanctions, and enhanced cooperation between UAE and foreign law enforcement bodies to protect the integrity of the UAE financial system from money laundering and terrorist financing. Finally, the recent re-imposition of sanctions by the United States (US) against Iran has contributed to a reluctance on the part of most UAE financial institutions to accept any funds from sources in Iran or that are otherwise linked to Iran-related transactions.

Over time, collectively, these changes will have a profound impact on the compliance environment in the UAE, particularly as it relates to financial crimes, and companies can no longer approach compliance issues casually. Compliance now needs to be on the agenda of boards and management teams, and strategic business decisions – whether they relate to the launch of new products or services, acquisitions and other opportunities to expand into new markets, or the selection of key business partners – will need to be undertaken only after a thorough compliance risk assessment. The best companies will reassess their compliance policies and risk exposure in light of these new developments. All companies would be well advised to make appropriate adjustments and take corrective actions now to ensure they can continue to operate successfully in the new compliance-focused regulatory environment. The UAE authorities have sent a clear signal that they are serious about protecting the UAE financial system from the risks of money laundering, terrorist-linked financing and other financial crimes. Companies that ignore this shift will do so at their peril.

You have just read the introduction to a recent Client Alert from Baker McKenzie Habib Al Mulla. Continue reading the article to learn more about the developments and enforcement trends in the UAE that will lead businesses to face greater regulatory scrutiny.

Borys is head of the Compliance practice in the Gulf and also advises on mergers & acquisitions (including privatizations), private equity and general corporate and commercial law.
Matthew’s practice focuses on advisory and contentious financial services regulation. Matthew advises banks, securities firms, other financial institutions and public sector bodies on all aspects of financial services regulation, including regulatory investigations. Called to the Bar of England & Wales, he has full rights of audience in the Dubai International Financial Centre (DIFC) Courts.
Mazen advises on all aspects of banking and finance law including Islamic finance, structured finance, securitisation, private equity, financial structuring and restructuring, cross-border transactions and investment funds. He is also experienced in domestic and international arbitration and is a qualified banker.
Mazen advises on all aspects of banking and finance law including Islamic finance, structured finance, securitisation, private equity, financial structuring and restructuring, cross-border transactions and investment funds. He is also experienced in domestic and international arbitration and is a qualified banker.