The UAE and Dubai in particular has taken a lead in the Middle East in the criminalisation of money laundering under Federal Law No. 4 in specific relation to the financial liberated zones. Based on Article 3(1) of the Federal Law 8/2004 AML laws are applicable to all the operations of a company, regardless of its business – financial, insurance - in these liberated zones. However, in practice many type of FFZ exist in Dubai (i.e. Dubai Gold) and operate in one of the free zones in the Dubai Multi-Commodities Centre,401 and as such the practical implication of AML laws is that each of the free zones establishes its distinctive rules and procedures in the implementation of the law. This is an unnecessary complex system, and as such, contributes to potential money laundering. Money laundering was criminalised and implemented under Article 2 of the Anti-Money Laundering law, which affirms:
“in cases where an individual intentionally becomes involved in the commitment or assistance in the transaction of property obtained from such offences that are stated in Article 2, he or she will be considered as the perpetrator of a money laundering offence.402
401 In particular focusing on the First EU Money Laundering Directive 91/308 and its legislative requirements and domestic public policies, Anti-Money Laundering measures have been considered highly important in the UAE. 401 The origin of money laundering offences was contained within the Drug Trafficking Offences Act of 1986, and was later on incorporated into the Drug Trafficking Act 1994. However, initially such offences were confined to the laundering of those proceeds involved in drug trafficking criminal acts. The government later on concluded that application of such law becomes difficult or appears impractical when it comes to distinguishing drugs from the non-drugs proceeds as well as introducing some new offences into the country’s Criminal Justice Act of 1988 that was superseded under the leadership of the Criminal Justice Act 1993, which was considered to be applicable to the proceeds of any inducible non-drug offences.
402 Similar focus can be confirmed from Law No. 4/2002. For more detailed explanation refer to Kalid Al-Mhery, ‘Money Laundering within the United Arab Emirates,’ Dar Al-Kreer, Dubai 2002.
The transfer or deposit of proceeds with the intention to conceal the illicit origin of it, the ability to conceal its true nature, location, movement rights, source as well as the acquisition, possession and use of proceeds of property play a significant part in the laundering of illegal funds.403
However, property obtained from the proceeds of crime in Dubai will not always seek a conviction. The public prosecutors’ team is required to prove all the elements of any predicate offence that reaches a criminal standard. This as elsewhere is a high threshold, and as such the level of evidence needed to secure a conviction is sometimes difficult to reach. In Dubai, however, the office of public prosecutor will, and can, provide evidence of a convicted predicate offence either from an assertion - obtained from any defendant within the UAE - or from an international country404 willing to supply the relevant evidence and documentation. This approach is one familiar with criminal justice systems in democratic nations where a conviction is only possible based on evidence and a conviction is sought on the offences that is easiest to prove rather than the gamut of possible offences.
This criminalisation of money laundering also involves all forms of money laundering (i.e. electronic transfer), and is related to Cyber Crimes Law No. 2 of 2006. Such laws are often used in cases where their sources are either concealed or associated with criminal proceeds and enforces money laundering in compliance with the Vienna and Palermo regulations under the
403 Riccardo Sansonetti. 'Switzerland: Legislation to Combat Money Laundering' (1998) 2(1) Journal of Money Laundering Control 82
404 In Article 2 of Anti-Money Laundering Act 2002 defined money laundering as: an act where an individual intentionally commits acts related to property derived from the offences stated within the item 2 of in the article, such an individual person is considered a perpetrator of money-laundering offences such as in the conversion or transferences of money laundering proceeds, aimed at concealing or disguising any illicit origin of these proceeds, the true nature of the act, source, origin, disposition movement, rights in relation to or the ownership of proceeds and the acquisition as well as possession or the use of those proceeds.404
key Anti-Money Laundering/CFT ordinances. Furthermore, the criminalisation of terrorism is achieved through the Federal Law reference No. 1 of 2004 terrorism offences (CFT Law) and the Cyber Crimes Law.405
However, as mentioned earlier laws are of little use unless implemented effectively (i.e. there is a system of surveillance and punishment if laws are broken) with a system of prevention and resources and personnel to monitor and enforce illegal transfer of funds. However, the FATF notes the importance of beginning with a legal framework and establishing accountable parties for the management and growth of the AML regulations and implementation. Until this is fully recognised, the criminalisation of money laundering, will have limited impact on those that seek to launder money in Dubai. This is perhaps why Dubai developed an Anti-Money Laundering and Suspicious Case Unit (AMLSCU) as early as 2002.