Sheikh Khalifa bin Zayed Al Nahyan, the President of the United Arab Emirates, has issued Federal Decree No (20) of 2018 "on anti-money-laundering and countering the financing of terrorism" with the aim of pleasing the Financial Action Task Force, the world's anti-money-laundering standard-setter.

Some of the articles in the law require anyone entering or leaving the country carrying cash, monetary or financial bearer instruments, precious metals or stones of value to declare them in line with regulations set out by the Central Bank. ​The decree-law brings the famous 'risk-based approach,' pioneered by the United Kingdom in the 'noughties, to money-laundering control at licensed enterprises.

The Ministry of Finance is keen to point out that the decree-law defines the perpetrator of a money-laundering offence as any person who is aware that the money was derived from a felony or misdemeanour and intentionally commits one of the following acts: the transfer or transport of the proceeds of crime with intent to conceal or disguise their illicit origin; and/or the concealment or disguise of the true nature, origin, location, way of disposition, movement or rights related to any proceeds or the ownership thereof; and/or the acquisition, possession or use of such proceeds. The law stipulates that money laundering is independent of the predicate crime and that the punishment of the person who has committed a predicate offence shall not protect him from being penalised for money laundering. ​It seems likely that the previous law that it will replace also says these thngs.

​The law recommends the establishment of a "Financial Information Unit" to be housed in the Central Bank, its purpose being to receive and investigate all reports submitted by financial institutions and other corporate establishments regarding suspected illicit financial activity. The FIU will also follow up and gather evidence on each suspicious transaction and share this information with the police for further investigation, if it sees fit. The unit will, if it wishes, ask financial institutions, designated non-financial businesses and professions or DNFBPs and the concerned authorities to provide additional information or documents relating to the reports. It may also exchange information (not necessarily from suspicious transaction reports) with its counterparts in certain countries. It has the job of establishing a database, or a special record, of the information and will have to protect it by establishing rules that govern its security and confidentiality. ​

The legislation has also set up a committee under the chairmanship of the Governor of the Central Bank. The "National Committee to Counter Money Laundering, Combating the Financing of Terrorism and Financing of Illegal Organisations", will propose systems, procedures and policies, follow up their implementation, identify and assess the risks of crime at the national level, tell regulators how to deal with financial institutions and co-ordinat the efforts of all concerned. The committee will also assess the effectiveness of the AML/ATF system and the representation of the UAE in international fora on the subject. ​

​Under the law, the authorities must force firms to comply with the decree and its executive regulations, assessing risks, supervising and inspecting financial institutions, non-financial businesses and charities. They will also make decisions about administrative sanctions and "grievance mechanisms." ​

The Ministry of Finance states: "The financial institutions and specific non-financial businesses and professions are required to continuously identify, evaluate, document and update crime risks in their area of business, undertake due diligence and determine their scope based on multiple risk aspects while taking into account the results of the national risk assessment. Furthermore they may not open accounts or conduct any financial or commercial transaction, anonymously or by a pseudonym or number, retain or provide any services to them. They must also develop internal policies, controls and procedures to manage, limit, and review the risks identified, and apply them to all their branches and subsidiaries in which they hold a majority stake."

All businesses and professions must meet all requirements imposed on them by their regulators with regards to the decisions of the United Nations Security Council under Chapter VII of the Charter of the United Nations and other relevant resolutions, i.e. sanctions. They must maintain records and documents ("local and international") and make them available to the competent authorities, as determined by the executive regulations of the decree which the Council of Ministers will set on the advice of the Minister of Finance. The decree will be implemented by law one month after its publication in the Official Gazette.

Meanwhile, the Dubai Financial Services Authority has passed a new rule obliging DNFBPs to tell it about any changes in their senior management (rule 15.1.4). Also, every DNFBP must notify the DFSA in writing 14 days in advance of it ceasing to do business in (or from) the Dubai International Financial Centre, which the DFSA polices. The transitional period for the new rule ends on 29th January.