Dedicated money laundering court established in Dubai

The new court will sit within the Court of First Instance and Court of Appeal, and is part of a wider drive by the United Arab Emirates (UAE) to boost its competitiveness as an international financial centre. It follows the launch of a UAE national action plan on financial crime, implementation of which will be overseen by a new executive office on anti-money laundering and countering the financing of terrorism (AML/CFT).

Dubai-based financial crime expert Seema Bono of Pinsent Masons, the law firm behind Out-Law, said: “This development is significant as it brings the UAE one step closer to achieving a more robust framework to fight financial crime and strengthen its financial system”.

“This is part of a raft of proactive measures and initiatives that the UAE has implemented in recent years, including the enhancement of the AML legislative framework and increased efforts to cooperate with neighbouring states in the GCC and beyond with respect to the exchange of intelligence and knowledge,” she said.  “While it is not yet clear how the court will operate in practice, a dedicated court in this area is important because AML cases are by their nature complex and inter-connected. A specialist court where judges have the right expertise and a track record in determining similar cases will result in better enforcement.”

The UAE has been working closely with neighbouring Saudi Arabia on AML/CFT initiatives. Last month, the governor of the UAE Central Bank, Khaled Balama, travelled to Saudi Arabia for discussions with Saudi Central Bank governor Fahad Al-Mubarak, who also chairs the Saudi AML Permanent Committee. The UAE Financial Intelligence Unit signed a memorandum of understanding with its Saudi counterpart in August 2019, setting out their intention to collaborate closely on AML efforts.

The UAE has signed several multilateral and bilateral treaties on enhanced supervisory cooperation and mutual legal assistance, including with other Gulf Cooperation Council (GCC) states. It is also a member of the Terrorist Financing Target Centre (TFTC), which was established in 2017 and is co-led by the US and Saudi Arabia.

In April, the UAE issued new guidelines on AML/CFT targeted at financial institutions, designated non-financial businesses and professions.

Bono explained that the UAE’s cash-intensive economy and large expatriate community, along with the size and accessibility of its financial sector and its geographic location, were particular “risk factors” making it vulnerable to ML/CFT activity.

“The UAE is also active in gold, precious metals and diamond trading, which creates further risk from a ML/CFT perspective,” she said. “It is crucial that businesses and the authorities are fully aware of the particular aggravating factors that give rise to increased exposure.”

Taresh Al Mansouri, director-general of Dubai Courts, said that the dedicated court, staffed by judges with particular experience of financial crime, would improve judicial efficiency.

“Reporting money laundering crimes is both an individual and collective responsibility,” he said. “Society plays a critical role in safeguarding economic and social security and strengthening the efforts of various stakeholders in responding to such crimes.”