UAE money launderers face 10 years jail and Dh500,000 fine

Abu Dhabi: New rules to strengthen the fight against money laundering are being discussed by the Federal National Council’s financial committee, said Ali Eisa Al Nuaimi, a member from Ajman on Sunday.

Al Nuaimi, also a rapporteur of the panel, told Gulf News, the rules are meant to further protect the integrity of the UAE’s financial system in keeping with the International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation — the FATF Recommendations.

The FATF Standards were revised in 2012 to strengthen global safeguards and provide governments with stronger tools to take action against financial crime.

“Protection will be provided to witnesses who testify against suspected criminals in organized gang crimes that include terrorism, money laundering, trafficking in drugs and humans and the big fraud cases,” Al Nuaimi said.
Under the new rules, anyone contravening the law may face up to ten years in prison, a fine of up to Dh500,000 or both. In the case of a business, the penalty is a fine ranging between Dh300,000 and Dh1 million. Also, the proceeds of any money-laundering activity are confiscated.

Board members, managers and staff of financial businesses who fail to report any money laundering transaction or terrorist financing will face a jail term of up to three years, a fine of up to Dh300,000 or both.

Tipping money laundering suspects about any financial review or action taken by the authorities will be punished with a jail term of up to a year, a fine of up to Dh100,000 or both.

Failure to declare any controlled substance or amounts to be determined by the authorities will be punished with a jail term, a fine or both.

Al Nuaimi said the law will be enforced with immediate effect from the date of being published in the official gazette.
The act of money-laundering was criminalised in 2002 pursuant to Federal Law no 4 regarding Criminalisation of Money Laundering, applicable to individuals and financial, trading and economic businesses operating in the UAE, including those located in the free zones.
Huge tax losses
With an estimated turnover of €600 billion (Dh3,020 billion) per year, money laundering causes huge tax losses in EU countries.

The Central Bank requires that banks and financial entities report any transactions carried out by customers, which they suspect may be related to illegal dealings, and may consequently be related to money laundering or financing of terrorism.

These banks and financial institutions are also required to verify the identity of their clients at all times, to maintain documents relating to the identities of customers for at least five years and to take note of any transaction which is not compatible with the income of its owner, and which does not seem to have any reasonable economic cause or clear legal objective. Such requirements also include monitoring all letters of credit which are opened.

The Central Bank has the power to impose sanctions, including the power to revoke an institution’s license, should a financial institution fail to comply with the rules.

There have been a number of multilateral meetings between UAE representatives and their counterparts in other countries to discuss means by which to collectively combat money laundering. For instance, UAE representatives met with their counterparts from the United States, Russia and Japan, among others, at the 3rd plenary meeting of the Financial Action Task Force in June 2012 to discuss exchanging information on the suspected financial flows into each other’s countries.

Hassle-free travel with gold jewellery to India

Indian expats can easily travel in and out of India with gold jewellery if they follow due procedure, the Indian Consulate in Dubai has clarified.

In recent months, Indian expats have been increasingly complaining about ‘harassment’ by customs officials at Indian airports, saying they are forced to pay heavy duties or asked to leave the jewellery behind in lockers.

Under Indian Customs rules, Non Resident Indians must specifically declare gold bullion and gold jewellery exceeding the free allowance, which is capped at Rs50,000 (Dh3,125) for men and Rs100,000 (Dh6,250) for women.

But Indian women, who traditionally wear gold jewellery and visit India frequently for weddings and other occasions, say the allowance is too low. While some still manage to easily pass through customs, others say they are targeted even if they have small quantities of ornaments on them. They claim there is little clarity on what kind of jewellery is dutiable, where and how it must be declared and whether the duty is charged at every entry.

A senior consul at the Indian Consulate told  there is no room for ambiguity. “The rules are simple and clearly defined in the Central Board of Excise and Customs’ Travellers Guide which is freely available online.”

He said that duty is chargeable (at about 10 per cent) only on gold jewellery purchased outside India and if it exceeds the free allowance.

He said all gold jewellery bought in India is exempt from duty if the passenger exiting the home country duly declares it and secures an export certificate at the airport customs desk.

“Once you have this export certificate for a piece of jewellery, you can bring it in or take it out any number of times without any hassle.”

He said the export certificate contains information like the passenger’s name, passport number and details of the gold like weight, description etc.

He said although customs officials at the airports do a valuation of the gold and issue the certificate on the spot, passengers are encouraged to approach them a day or two in advance to ease the rush. They can also present purchase invoices or external valuation certificates issued by government-approved jewellers to obtain the export certificate.

But what if an expat passenger from the UAE is travelling to India with undeclared jewellery bought in India earlier?

“This can be a grey area as you would need to prove to customs authorities that you have indeed purchased the gold in India,” said the consul.

He said free allowance is applicable only to pure gold jewellery. “Jewellery studded with stones does not qualify for free allowance.”

He said: “Bullion up to 1kg per person can be imported into India by paying duty of around 10 per cent. In recent days, officials have been asking for the individual’s documents, source of purchase etc to ensure he/she is not a carrier for others.”
Rate of Duty (CBEC Traveller’s Guide)
Gold bars, other than tola bars, bearing manufacturer or refiner’s engraved serial number and weight expressed in metric units or gold coins: 
6 % Advalorem + 3 % cess


Gold in any other form, including tola bars and ornaments, but excluding ornaments with studded stones 
or pearls : 
10 % Advalorem + 3 % cess

Licence made mandatory soon for teaching in UAE classrooms

Soon teachers will not be permitted to teach in UAE classrooms unless they have a licence, the Undersecretary of the Ministry of Education said Tuesday during Youm Al Wafa’a (Loyalty Day).

“To be permitted to teach in the UAE, teachers will have to have a federal licence that ensures a unified system and teaching standards in schools,” said Marwan Al Sawaleh, Undersecretary at the ministry.

Al Sawaleh said the cabinet ordered the ministry to submit all the suggested procedures and legislations by the end of this year. Once approved and implemented the licence will be required by all teachers in the UAE.

“After the approval the federal licence system will be introduced in phases, to include all teachers under a unified system.”Al Sawaleh made the statement on the sidelines of Youm Al Wafa’a, an annual award ceremony organised by the ministry to honour educational and media supporters as well as retired ministry employees.

UAE may soon approve new companies law: Minister

The UAE is soon expected to approve a long-awaited new law covering the operations of companies in the country, a step towards attracting fresh foreign investment, the economy minister said on Monday.

"The companies law is with the government to be ratified by the President His Highness Sheikh Khalifa bin Zayed Al Nahyan - we are expecting that soon," Sultan bin Saeed Al Mansouri, Minister of Economy, told reporters.

The new law, which has been years in the making, contains dozens of articles seeking to make limited liability and joint stock companies simpler to manage and more attractive to investors, while strengthening corporate governance in areas such as companies making loans to their directors.

The law would provide for companies’ documentation to be made publicly available, a step towards a more transparent corporate environment in the UAE.

One article, contained in a version of the law given preliminary approval last year, would reduce the minimum free float in initial public offers of shares to 30 per cent from 55 per cent, the ratio which currently applies on the UAE's two main stock exchanges.

The minimum ratio deters some corporate founders who want to maintain majority ownership, and has been criticised as one factor encouraging UAE companies to list their shares in overseas markets such as London rather than domestically. Officials have not confirmed that the article lowering the ratio will be included in the final version.

The law will certainly be less radical than some investors had hoped; last year the consultative Federal National Council rejected an article that would have eased tight controls on foreign ownership of companies, citing security fears and threats to local businesses.

The article would have given the UAE cabinet the power to let foreign parties own stakes of up to 100 per cent in companies outside free zones. Currently, foreigners can generally hold stakes of up to 49 per cent in businesses located outside free zones.

Last year, the economy minister said the article liberalising foreign ownership would be included in a draft foreign investment law. That bill has now been finalised by a ministerial legal committee and is awaiting approval of the FNC, Mansouri said on Monday.

Meanwhile, a law on small and medium-sized enterprises, which the cabinet hopes will boost the growth of SMEs and encourage UAE citizens to establish companies, is on its way, Mansouri said: "The SMEs law has been ratified by the President. That should be out soon."

The law is expected to include provisions encouraging government agencies to provide support to SMEs.

The UAE expects to attract € 8.6 billion ($11.9 billion; Dh43.67bn) in foreign direct investment into its non-oil sector in 2014, 20 per cent more than last year, Mansouri said.

The second biggest Arab economy is investing billions of dollars in industry, tourism, real estate and infrastructure to wean its economy off its reliance on oil exports.

Emirates ID Card to include traffic details-Federal Traffic Council

The Federal Traffic Council has recommended unifying drivers' traffic file information and linking it to the Emirates ID card so that it takes the same ID number. This is in a bid to make it easy for customers to complete their transactions in any one of the emirates in the country.

Major General Mohammed Saif Al Zafeen, Head of the Federal Traffic Council and Deputy Chief Commander for Operational Affairs at Dubai Police,  said that the council has finalised drafts of the recommendations related to traffic law and is expecting suggestions on the possibility of adding new texts that are commensurate with the developments and requirements of traffic security.

Al Zafeen added that the council has issued a set of recommendations to be submitted to the higher committee for policies and strategies headed by Lt. General Sheikh Saif bin Zayed Al Nahyan, Deputy Prime Minister and Minister of the Interior, to take the final relative decision, noting that Sheikh Saif has given clear directives for unifying traffic related procedures in all the emirates, aiming to eliminate any deficiencies or differences in regulations or application.

He pointed out that members of the council and directors of traffic departments in the country have unanimously approved these recommendations. Mechanisms to implement the recommendations will be coordinated with the relevant authorities in each emirate, he added.