Penalties and fines of up to 100,000 dirhams (AED100,000 – US$27,223) are in the offing for UAE-based companies that fail to comply with reporting beneficial ownership information under new regulations that take effect on 1 July.

The UAE has already launched a campaign to ensure that 513,000 non-financial businesses regulated by 38 licensing authorities provide data on ultimate beneficial owners.

Non-compliance penalties

Those businesses will soon face fines for recurrent and continued non-compliance as well as  additional administrative penalties that include the suspension of licenses and restrictions on directors’ authority.

The move is one of several efforts made by the UAE since 2020 when the UAE was placed under a one year observation by the Financial Action Task Force (FATF) for concerns over the lack of legal action against money laundering.

The FATF was particularly concerned about money laundering, terrorism financing, weapons of mass destruction, and loopholes in the property and precious metal industries.

Gold concerns

How effective the UAE’s actions will be remains to be seen and recent developments in India call into question the emirates’ commitment to clean up and regulate trade in metals, and gold in particular.

In June 2020, Indian customs discovered over 30 kilograms of gold worth more than US$2.1 million at the official exchange rate in diplomatic baggage addressed to the UAE consulate-general office in Thiruvananthapuram, the capital of the southern Indian state of Kerala.

False documents

Documentation describing the baggage listed its contents as bathroom fittings, noodles, biscuits and dates.

Investigators have so far arrested around 30 people in relation with the case, including financiers, gold traders, former employees of the UAE Consulate and a principal secretary to the Kerala chief minister.

Categories: Trade Based Financial crimes News

Tags: beneficial ownership, FATF, gold, Money laundering, Trade-based terrorism financing, UAE, weapons of mass destruction