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UAE ramps up business ownership rules to combat money laundering, terrorism financing

UAE ramps up business ownership rules to combat money laundering, terrorism financing

by | Dec 22, 2023 | AML

Key points:

The latest updates to the business ownership norms include:


  • New rules help identify companies’ real owners and prevent hiding ownership through complex structures.

  • Five steps are outlined to determine the actual beneficiary owner of a company.

  • Nominee board members must disclose their status and provide necessary information to companies.

  • A risk management approach is emphasized for enterprises to prevent money laundering and terrorism financing.

  • A dedicated AML/CFT unit will be established within the Registrar’s office to oversee compliance and report to the Ministry.

  • Administrative sanctions include warnings and financial penalties for violations, with a possible license suspension.

Dubai: The UAE Ministry of Economy has adopted two new resolutions to the real beneficiary procedures in the country as it ramps up enforcement of laws on anti-money laundering and combating the financing of terrorism. 


The updated resolutions to the beneficiary laws also outline administrative sanctions for breaches of Cabinet Decision No.109 2023 on the organization of the real beneficiary procedures. Administrative sanctions include warnings and financial penalties for violations, with possible license suspension, explained the Ministry. 


These aim to support the competitiveness of UAE’s business environment, said Abdullah Ahmed Al Saleh, Undersecretary of the Ministry of Economy.

What is the real beneficiary declaration?
The UAE requires businesses in the country to submit data on their ultimate beneficiaries as a means of anti-money laundering and to combat the financing of terrorism (AML/CFT).

Under the resolution, the ‘Beneficial Owner’ is the one who controls the company, whether in the country of origin or registered in the UAE. 
“The updates to the system ensure that the real beneficiary data of all relevant private enterprises are collected and recorded, as there are nearly 700,000 enterprises operating in various sectors in the UAE,” said Al Saleh.


Introduced in some free zones

The beneficial ownership regime was introduced in some free zone jurisdictions, such as Dubai International Finance Centre (DIFC), Abu Dhabi Global Market (ADGM) and Dubai Development Authority (‘DDA’), some time ago, according to legal experts.



With the law
on Thursday, the Ministry said updates to the real beneficiary procedures are a key focus area within the UAE’s AML/ CFT system. 
Al Saleh said the latest resolutions on the real beneficiaries and the relevant sanctions represent an important milestone, contributing to strengthening efforts to address suspicious financial activity. 


He explained, “The adoption of these two new resolutions constitutes an important addition to the previous AML legislation publicized by the country.”
Secondly, the Undersecretary said the changes also involve new mechanisms for registration authorities to set basic rules for real beneficiary procedures. This aligns with licensing, registration, and partner or shareholder registry processes.


“It also includes new updates to improve the collection, assessment, and registration of real beneficiary data of all private sector enterprises within the country, including those in commercial free zones, in cooperation with relevant local licensing entities.
Al Saleh said the Ministry of Economy would spare no effort in strengthening the national AML/CFT system. 




Source: https://gulfnews.com/business/economy/uae-ramps-up-business-ownership-rules-to-combat-money-laundering-terrorism-financing-1.100064441