The UAE comprises many different free trade zones. Do the UAE laws apply to all parts of the UAE?

In general, they do, except where a free trade zone – such as the Dubai International Finance Centre (DIFC) – issues its own rules and regulations on the same subject. For example, if a free trade zone has applicable “civil” rules and regulations relating to anti-money laundering and counter-terrorism, the UAE federal law would not apply within that zone. The only exception to this general rule relates to the UAE’s criminal law. Federal criminal law applies across the UAE, including within its free trade zones.

In relation to anti-money laundering and counter-terrorism financing, what are the main legal provisions within the UAE?

There are four federal laws relating to money laundering and counter-terrorism, dating back to 1987. They are: Federal Law Number 3 of 1987, Federal Law Number 35 of 1995, Federal Law Number 4 of 2002, and Federal Law Number 1 of 2004. Both the Ministry of Economy and Commerce and the Central Bank issue circulars on the subject, and the Central Bank also issues Directives. Most of these laws and rules aren’t notably different to those that you would find in other jurisdictions, such as the US or Great Britain.

Within the DIFC, the Dubai Financial Services Authority (DFSA) has produced its own anti-money laundering rules. The DFSA is the independent regulator that governs the DIFC’s financial services companies, and also ancillary service providers such as law firms.

Within the DIFC, which are the most important rules relating to money laundering and counter terrorism?

Companies must appoint a Money Laundering Reporting Officer (MLRO) and a deputy to act in their absence. The regulations require that companies carry out due diligence checks on potential customers or beneficial owners of funds. They are required to complete a comprehensive customer profile, verify their integrity and locate the source of any funds to be deposited. This duty falls on both company employees and the MLRO.

For financial service companies, evidence obtained under the identification procedure must be kept for at least six years after the customers’ account is closed. Other authorised firms, such as law firms, must keep their identification evidence for at least six years after the consummation of any transaction they advised on.

What are the rules relating to "tipping off" those engaged in suspicious activities?

Under Federal Law Number 2 of 2002, no firm or any of its employees may inform a suspected individual that their transactions are being scrutinised for money laundering. Failure to adhere to this policy may result in a fine or imprisonment.