Federal Law No. 4 of 2002
Regarding the Criminalization of Money Laundering
Money Laundering
Federal Law No. 4
Issued on 22 / 1 / 2002 AD.
Corresponding to 8 Dhu al-Qi'dah 1422 H.
Regarding the Criminalization of Money Laundering
We, Zayed bin Sultan Al Nahyan, President of the United Arab Emirates,
Having reviewed the Constitution,
And Federal Law No. 1 of 1972 concerning the competencies of ministries and the powers of ministers and its amending laws,
And Federal Law No. 10 of 1980, concerning the Central Bank, the Monetary System, and the Regulation of the Banking Profession and its amending laws,
And the Penal Code issued by Federal Law No. 3 of 1987,
And the Criminal Procedure Law issued by Federal Law No. 35 of 1992,
And Federal Law No. 14 of 1995 on Combating Narcotic Drugs and Psychotropic Substances,
And Federal Decree No. 55 of 1990 approving the accession to the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988,
And based on the proposal of the Minister of Finance and Industry, the approval of the Council of Ministers, the approval of the Federal National Council, and the ratification of the Supreme Council of the Union,
We have issued the following law:
Article One - Definitions:
For the purposes of this law, the following words and phrases shall have the meanings assigned to each of them unless the context indicates otherwise:
The State: The United Arab Emirates.
The Minister: The Minister of Finance and Industry.
The Central Bank: The Central Bank of the United Arab Emirates.
The Governor: The Governor of the Central Bank.
The Committee: The National Anti-Money Laundering Committee.
Funds: Assets of any kind, whether material or immaterial, movable or immovable, and documents or instruments evidencing ownership of assets or any right related thereto.
Money Laundering: Any act involving the transfer, conversion, or deposit of funds, or the concealment or disguise of the true nature of funds derived from any of the crimes stipulated in clause 2 of Article 2 of this law.
Proceeds: Any funds derived directly or indirectly from the commission of any of the crimes stipulated in clause 2 of Article 2 of this law.
Freezing or Seizure: The temporary prohibition on the transfer, conversion, disposition, or movement of funds by an order issued by a competent authority.
Confiscation: The permanent deprivation of ownership of funds by virtue of a judgment issued by a competent court.
Instrumentalities: Anything used or intended to be used in any way in the commission of any of the crimes stipulated in clause 2 of Article 2 of this law.
Financial Institutions: Any bank, finance company, exchange house, financial and monetary intermediary, or any other institution licensed by the Central Bank, whether publicly or privately owned.
Other Financial, Commercial, and Economic Institutions: Institutions licensed and supervised by entities other than the Central Bank, such as insurance, financial markets, and others.
Chapter One
Definition of Money Laundering
Article 2 - Perpetrator of a Money Laundering Offense *:
1 - Anyone who intentionally commits or assists in any of the following acts with respect to funds derived from any of the crimes stipulated in clause 2 of this article is considered to have committed the crime of money laundering:
a - Converting, transferring, or depositing the proceeds with the intent of concealing or disguising their illicit origin.
b - Concealing or disguising the true nature, source, location, disposition, movement, or ownership of the proceeds or rights related thereto.
c - Acquiring, possessing, or using such proceeds.
2 - For the purposes of this law, funds are proceeds from the following crimes:
a - Narcotic drugs and psychotropic substances.
b - Kidnapping, piracy, and terrorism.
c - Crimes committed in violation of the provisions of the environmental law.
d - Illicit trafficking in firearms and ammunition.
e - Bribery, embezzlement, and damage to public funds.
f - Fraud, breach of trust, and related crimes.
g - Any other related crimes stipulated in international conventions to which the State is a party.
Article 3 - Liability of Institutions *:
Financial institutions and other financial, commercial, and economic institutions operating in the State shall be criminally liable for the crime of money laundering if it is committed intentionally in their name or for their account, without prejudice to the administrative penalties stipulated in the law.
Chapter Two
Obligations and Competencies of Government Authorities
Article 4 - Competencies of Government Authorities *:
The Central Bank may, in accordance with this law, order the freezing of suspected funds held by financial institutions for a period not exceeding 7 days.
The Public Prosecution may order the seizure of suspected funds, proceeds, or instrumentalities in accordance with its established procedures.
The competent court may order the precautionary seizure for indefinite periods of any funds, proceeds, or instrumentalities if they are derived from or related to a money laundering crime.
Article 5 - Obligations of Government Authorities *:
1 - Without prejudice to what is stated in Article 4 of this law, a criminal case shall not be filed against the perpetrator of one of the crimes stipulated in this law except by the Public Prosecutor.
2 - Seizure and precautionary seizure orders on funds held by financial institutions shall only be executed through the Central Bank.
Article 6 - Disclosure System for Amounts *:
The Central Bank shall determine the maximum amount of cash allowed to be brought into the State without the need for disclosure. Any amount exceeding this limit shall be subject to the disclosure system established by the Central Bank.
Article 7 - Financial Information Unit *:
A "Financial Information Unit" shall be established at the Central Bank to combat money laundering and suspicious cases. All relevant financial, commercial, and economic institutions shall send reports of suspicious transactions to it. The Committee shall determine the format of the suspicious transaction report and the method of its submission. The unit must make the information available to law enforcement authorities to facilitate their investigations. This unit may exchange information on suspicious case reports with similar units in other countries in accordance with international conventions to which the State is a party or on the condition of reciprocity.
Article 8 - Reporting Money Laundering Cases to the Public Prosecution *:
1 - The unit stipulated in Article 7 of this law, after studying the cases reported to it, shall inform the Public Prosecution to take the necessary measures.
2 - If a report of money laundering is received directly by the Public Prosecution, it shall take the necessary measures after seeking the opinion of the aforementioned unit on the content of the report.
Article 9 - National Anti-Money Laundering Committee *:
The Minister shall form a committee chaired by the Governor to combat money laundering in the State, to be called the "National Anti-Money Laundering Committee," consisting of one or more representatives from the following entities, based on their nomination:
- The Central Bank.
- Ministry of Interior.
- Ministry of Justice, Islamic Affairs and Awqaf.
- Ministry of Finance and Industry.
- Ministry of Economy and Commerce.
- Authorities concerned with issuing commercial and industrial licenses.
- The Customs Council in the State.
Article 10 - Competencies of the National Anti-Money Laundering Committee *:
The Committee shall be competent in the following:
- Proposing regulations and procedures for combating money laundering in the State.
- Facilitating the exchange of information and coordination among the represented entities.
- Representing the State in international forums related to combating money laundering.
- Proposing the regulatory bylaws for the Committee's work.
- Any other matters referred to it by the competent authorities in the State.
The remuneration of the Committee members shall be determined by a decision of the Board of Directors of the Central Bank, and the regulatory bylaws shall specify the dates and method of the Committee's work.
Article 11 - Commitment of Institutions to Regulations and Bylaws *:
The authorities concerned with licensing and supervising financial institutions and other financial, commercial, and economic institutions shall establish appropriate mechanisms to ensure the commitment of the said institutions to the regulations and bylaws for combating money laundering in the State, including submitting reports of suspicious cases immediately upon their occurrence to the unit referred to in Article 7 of this law.
Article 12 - Confidentiality of Information *:
All authorities must treat the information they obtain related to the crimes stipulated in this law with confidentiality and shall not disclose it except to the extent necessary for its use in investigations, lawsuits, or cases related to the violation of the provisions of this law.
Chapter Three
Penalties
Article 13 - Penalty for Acts Stipulated in Article 2/1 *:
Anyone who commits any of the acts stipulated in clause 1 of Article 2 of this law shall be punished by imprisonment for a period not exceeding seven years or a fine not exceeding (300,000) three hundred thousand dirhams and not less than (30,000) thirty thousand dirhams, or both penalties, with confiscation of the proceeds or property equivalent to the value of those proceeds, or the equivalent of those proceeds if they have been partially or wholly converted or transformed into other property or mixed with other property acquired from legitimate sources.
Article 14 - Penalty Imposed on Institutions *:
Anyone who violates the provision of Article 3 of this law shall be punished by a fine of not less than (300,000) three hundred thousand dirhams and not exceeding (1,000,000) one million dirhams, with confiscation of the proceeds or property equivalent to the value of those proceeds, or the equivalent of those proceeds if they have been partially or wholly converted or transformed into other property or mixed with other property acquired from legitimate sources.
Article 15 - Penalty Imposed on Boards of Directors and Employees of Institutions *:
The chairmen and members of the boards of directors, managers, and employees of financial institutions and other financial, commercial, and economic institutions who knew and refrained from reporting any act that occurred in their institutions and was connected to a money laundering crime to the unit stipulated in Article 7 of this law shall be punished by imprisonment or a fine not exceeding (100,000) one hundred thousand dirhams and not less than (10,000) ten thousand dirhams, or both penalties.
Article 16 - Penalty for Tipping-off about Suspicious Transactions *:
Anyone who notifies any person that their transactions are under review for suspicious activities or that the security authorities and other competent authorities are investigating their suspicious activities shall be punished by imprisonment for a period not exceeding one year or a fine not exceeding (50,000) fifty thousand dirhams and not less than (5,000) five thousand dirhams, or both penalties.
Article 17 - Crime of False Reporting *:
Anyone who, in bad faith, submits a report to the competent authorities about the commission of a money laundering crime with the intent to harm another person shall be punished with the maximum penalty for the crime of false reporting.
Article 18 - Penalty for Violation of Disclosure of Amounts *:
Anyone who violates the provision of Article 6 of this law shall be punished by a fine not exceeding (10,000) ten thousand dirhams and not less than (2,000) two thousand dirhams.
The amounts subject to the violation shall be seized until released by a decision of the Public Prosecution, unless they are proven to be linked to another crime.
Article 19 - Penalty for Violation of the Provisions of the Law *:
Anyone who violates any other provision of this law shall be punished by imprisonment or a fine not exceeding (100,000) one hundred thousand dirhams and not less than (10,000) ten thousand dirhams.
Article 20 - Exemption of Institutions from Criminal Liability *:
Financial institutions and other financial, commercial, and economic institutions, their board members, employees, and legally authorized representatives shall be exempt from criminal, civil, or administrative liability that may arise from providing the required information or from breaching any restriction imposed to ensure the confidentiality of information by a legislative, contractual, regulatory, or administrative text, unless it is proven that the reporting was done in bad faith with the intent to harm the owner of the transaction.
Chapter Four
International Cooperation
Article 21 - International Agreement or Condition of Reciprocity *:
The competent judicial authority may, upon a request from a judicial authority in another state with which the State has a ratified agreement or on the condition of reciprocity, if the criminal act is punishable in the State, order the tracing, freezing, or precautionary seizure of funds, proceeds, or instrumentalities resulting from or used in a money laundering crime.
Article 22 - Judgment Issued by a Judicial Authority in Another State *:
Any judgment or judicial order providing for the confiscation of funds, proceeds, or instrumentalities related to money laundering crimes issued by a competent court or judicial authority in another state with which the State has a ratified agreement may be recognized.
Chapter Five
General Provisions
Article 23 - Executive Regulations *:
The Council of Ministers shall issue the executive regulations for the provisions of this law, based on the proposal of the Committee and the presentation of the Minister.
Article 24 - Conflicting or Contradictory Provisions *:
Any provision that violates or contradicts the provisions of this law is hereby repealed.
Article 25 - Publication in the Official Gazette *:
This law shall be published in the Official Gazette and shall come into force from the date of its publication.
Issued by us in Abu Dhabi
On 8 Dhu al-Qi'dah 1422 H.
Corresponding to 22 January 2002 AD.
Zayed bin Sultan Al Nahyan
President of the United Arab Emirates
This Federal Law was published in the Official Gazette No. 376, p. 9