Other BriefingsUAE’s New Organizational Framework to Combat Financial Crimes
In a move to bolster its fight against financial crimes, the UAE introduced in August this year Federal Decree Law No. (7) of 2024 amending some provisions of Federal Decree Law No. (20) of 2018. The new Decree enhances the country’s anti-money laundering (AML), combating the financing of terrorism (CFT), and illegal organization financing frameworks. This legal update marks a further step in aligning the UAE’s regulatory system with global standards and reinforcing its leadership in combating financial crime.
Key highlights of the new federal decree
The most notable feature of the new Decree is the establishment of the National Committee for AML, CFT, and Financing of Illegal Organizations (NAMLCFTC). Formed by Cabinet decision, this Committee is tasked with developing and implementing a comprehensive strategy to combat financial crimes. By centralizing efforts under the NAMLCFTC, the UAE aims to enhance coordination, elevate compliance standards, and improve the effectiveness of its anti-crime initiatives.
UAE Strengthens Anti-Money Laundering and Counter-Terrorism Financing Framework
As of September 23, 2024, the UAE Cabinet has approved a resolution replacing the Executive Office of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) with the newly established National Anti-Money Laundering and Combating Financing of Terrorism and Illegal Organisations Committee (NAMLCFTC). This committee will assume all the rights and obligations previously held by the Executive Office.
The transition, which took place in accordance with Federal Decree Law No. (7) of 2024, also mandates that all employees of the Executive Office be transferred to the NAMLCFTC. Hamid Saif Al Zaabi has been appointed Secretary-General of the new committee, which will be chaired by Khaled Mohamed Balama, Governor of the Central Bank of the UAE.
As part of the reforms, a General Secretariat has been established within the NAMLCFTC, tasked with overseeing the implementation of the national strategy on anti-money laundering and countering the financing of terrorism. This move reflects the UAE’s ongoing commitment to protecting both its domestic and international financial systems from illegal activities.
Governor Balama emphasized the significance of the decision, noting, “This Cabinet resolution reflects the UAE’s firm commitment to safeguarding the financial system and combating financial crimes globally.” He highlighted the country’s integrated approach, grounded in strong legal and institutional frameworks, to ensure robust and sustainable national capabilities in this critical area.
Furthermore, the creation of the NAMLCFTC aims to enhance coordination and communication between local and federal institutions, as well as improve international cooperation. This effort is seen as a vital step in reducing financial crime risks while reinforcing the UAE’s position as a leading global financial hub, promoting economic sustainability, and ensuring compliance with global standards.
The new committee’s role in overseeing anti-money laundering initiatives will not only strengthen the UAE’s national system but also help in developing strategies that mitigate risks and support economic growth. Through these measures, the UAE continues to consolidate its leadership in global financial integrity and crime prevention efforts.
Responsibilities of the NAMLCFTC
The NAMLCFTC is responsible for various crucial tasks, including:
- Developing a national AML/CFT strategy and proposing new regulations.
- Coordinating with international bodies to identify high-risk countries and enforce customer due diligence (CDD) measures.
- Facilitating the exchange of information among relevant authorities.
- Collecting and analyzing statistics to assess the effectiveness of AML/CFT regulations.
- Representing the UAE in international forums related to money laundering and terrorism financing.
Formation of the Supreme Committee for oversight
Complementing the NAMLCFTC’s efforts is the newly formed Supreme Committee for the Oversight of the National Strategy for AML and CFT, which will ensure that strategies are effectively implemented across the UAE. This Committee is authorized to issue decisions and guidelines to various entities, ensuring consistent application of the national AML/CFT strategy.
Role of the General Secretariat
To support the operations of these committees, the Decree has also established a General Secretariat, led by a Secretary-General who acts as the Vice-Chairperson of the National Committee. The Secretariat is critical in maintaining the seamless flow of communication between the National and Supreme Committees, ensuring that operational and strategic efforts are aligned.
Strengthening AML/CFT compliance and enforcement
The new Decree enhances the UAE’s capacity to fight financial crime by improving the flow of information, streamlining reporting processes, and ensuring that AML/CFT strategies are applied consistently across all sectors. This integrated system hopes to ensure swift responses to emerging financial crime threats, making the country’s framework more robust and adaptable.
For businesses operating in the UAE, these updates offer several benefits. The Decree provides a more unified structure for compliance, facilitating easier communication with regulatory authorities and offering centralized support for financial institutions and non-financial businesses. This also improves coordination between the public and private sectors, enhancing overall efficiency and transparency.
A commitment to global standards
The new Federal Decree-Law also indicates the UAE’s commitment to meeting international standards. By establishing the NAMLCFTC and Supreme Committee, the UAE has sought to align itself with best practices in financial crime prevention, reinforcing its legal framework and safeguarding its financial ecosystem. The Supreme Committee will also oversee the development of the Mutual Evaluation Report, which assesses the UAE’s compliance with international AML/CFT standards and implements necessary recommendations.
Conclusion
This Decree is another key development in the UAE’s fight against financial crimes. It strengthens the legal and regulatory framework by enhancing coordination, improving transparency, and promoting accountability across all sectors. By aligning with global standards, the UAE also sets a benchmark for future reforms.
For businesses, financial institutions, and regulatory bodies, these changes should bring in greater clarity, streamlined operations, and a unified approach to tackling financial crimes, ultimately contributing to a safer and more transparent financial environment in the UAE.
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