UAE corporate criminal law update

The United Arab Emirates (“UAE”) continues to lead the Arab world in Anti-Bribery and Anti-Corruption (“ABC”). The UAE provides a business-friendly environment and effective and efficient public administration; it criminalizes active and passive bribery, embezzlement, abuse of power and facilitation payments, enforces its domestic ABC legislation, and continues to work with international partners to combat bribery and corruption.

Transparency International’s Corruption Perceptions Index

Transparency International, a non-profit non-governmental civil society organization leading the international fight against corruption, publishes an annual Corruption Perception Index (“CPI”), which ranks 180 countries around the world based on the perceived level of public sector corruption . Transparency International determines the CPI rankings through expert assessments and opinion surveys. It then gave each country a score from zero (representing a high degree of corruption) to 100 (representing no corruption). Then using these scores, Transparency International ranked each country from 1 to 180.

UAE historical rankings

In 2002, Transparency International ranked the UAE 37th out of 133 countries for the first time. In 2019 and 2020, the UAE ranked 21st out of 180 countries.

Most recently, in 2021, the UAE was ranked 24th.Although slightly down compared to previous years, UAE retains its position Most Corrupt Country in the Middle East and North Africa (“MENA”) Region And went on to outpace many other non-MENA countries, including the US, South Korea, Spain, Portugal and Italy.

Recent ABC Updates

We have previously written about the UAE’s modernisation of its ABC legislation, which brings it very much in line with developed systems in other jurisdictions.For example, see our previous blog post herewhich lists the main features of the new law.

In this article, we examine some of the other aggressive measures recently taken by the UAE to continue the fight against bribery and corruption, which are not captured by the CPI, which measures only perceived public sector corruption.

Law enforcement activities

First, we ended our previous post by predicting that modernized laws herald an increase in law enforcement activity, and some recent prosecutions seem to suggest that predictions have come true.

E.g, An investor jailed for a year for offering a Dh10,000 bribe To the customer service staff at the Government Center.

Investors want officials to transform the investor’s firm from a management consulting firm into an investment fund manager without providing the necessary documentation. Instead of accepting a bribe, the officer reported to the Ministry of Economic Development and Dubai Police.

Financial Secrecy and Money Laundering Reform

Second, similar to the UAE’s ABC legislative reforms, the UAE has undertaken a series of actions to develop and deploy a complex financial crime compliance framework in line with the expectations and recommendations of the Financial Action Task Force (“FATF”), an intergovernmental A decision-making body whose purpose is to establish international standards and formulate and promote policies at the national and international levels to combat money laundering and terrorist financing.

For example, the UAE enacted a new Anti-Money Laundering and Counter-Terrorism Financing (“AML/CFT”) law in October 2018 (see our analysis here), which established an AML/CFT Executive Office to oversee the implementation of the UAE’s national AML/CFT strategy and national action plan, and a dedicated new court focused on combating money laundering (see our analysis here) and regularly publish guidance to financial institutions and designated non-financial businesses and professions (referred to as “DNFBPs”) on how best to comply with the law (see, for example, our analysis of the June 2021 Suspicious Activity/Transaction Guidance here).

private sector reform

Third, the UAE has reformed practices and transparency in reporting and registering beneficial interests and nominating directors.

simply put, Cabinet Resolution No. (58) of 2020 Regulating the Beneficial Owners Procedure (the “Resolution”) New requirements for UAE entities to disclose their beneficial owners have been introduced. The main purpose of the resolution is to increase the transparency of entities registered in the UAE, improve corporate governance, and prevent financial fraud and tax evasion.

Other considerations

Acting on South Africa’s international arrest warrants for widespread bribery, corruption and misappropriation of state assets, Dubai Police recently arrested Atul and Rajesh Gupta. They are now awaiting extradition under the 2018 extradition treaty ratified by the two countries in 2021. Even recently, UAE announces intention to sign seven new extradition agreements This year to fight corruption.

The steps underscore the UAE’s concerted efforts to prevent it from being misused by financial criminals seeking shelter for illicit funds.