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Federal Decree-Law No. (26) of 2021 - concerning countering Money Laundering Crimes

Concerning Countering Money Laundering Crimes and combating the Financing of Terrorism and the Financing of Unlawful Organizations According to Federal Decree-Law No. (26) of 2021 amending some provisions of Federal Decree-Law No. (20) of 2018.

Decree-Law No. 26 of 2021 was issued to complement Federal Decree-Law No. 20 of 2018 and keep pace with developments in this regard, in a way that includes in money laundering and terrorist financing operations, in order to close the door for these entities and limit their avoidance of penalty as much as possible.

The first amendment set out in the first article of the decree is the addition of a new definition, which is: Virtual assets: a digital representation of value that can be digitally traded or transferred, and can be used for payment or investment purposes, and other things as determined by the executive regulations of the law.

A new definition which was also provided in the same article: Virtual asset service providers: any natural or legal person who conducts, as a business, one or more of the activities of virtual assets specified by the executive regulations of this Decree-Law, or the operations related thereto for the benefit of or on behalf of another natural or legal person.

An amendment was also made to Article 12 of the Decree, specifying countries that suffer from weaknesses in the systems of combating money laundering and terrorist financing and determining the countermeasures to be taken and other measures commensurate with the degree of risk.

In accordance with the amendments to Article 13- Clause 1, the supervisory authorities, each according to its competence, have the right to assess the risks of a possible crime in financial facilities, the activities of virtual assets and the activities of virtual asset service providers.

While the amendment was stated in Clause 6 of Article 22 of the amended decree, the court on its own initiative, or at the request of the Public Prosecutor or his delegate, reduce or exempt from the penalty.

While the penalty in Article 25 is increased by imprisonment for a period of one year instead of six months (in the previous law) and a fine of not less than one hundred thousand dirhams (AED 100,000) and not more than five hundred thousand dirhams (AED 500,000), or either of the two penalties for anyone who notifies or alerts a person about transactions under review regarding suspicious operations or that the competent authorities are investigating it.

The amended Article 26 added in its first clause that: If it cannot be ruled for the confiscation of funds, proceeds, or instrumentalities because it is not possible to seize them, or because they are related to the rights of bona fide third parties, the court shall award a fine equivalent to its value at the time of the crime.

The amended Article 28 has added a imprisonment sentence of not less than one year and not more than 7 years and a fine of not less than fifty thousand dirhams (AED 50,000) and not more than five million dirhams (AED 5,000,000), or either of these two penalties, for whoever violates the instructions issued by the relevant authority in the country regarding the implementation of Resolutions issued by the United Nations Security Council under Chapter VII of the United Nations Charter on preventing and suppressing terrorism and its financing, preventing, suppressing and halting the proliferation of weapons of mass destruction and its financing, and other relevant resolutions.

As for article 16 of the amended decree-law, it stipulates that the executive regulation regulates the obligations of virtual asset service providers.

Article 25 reduced the penalty of imprisonment to a period of not less than three months (instead of 6 months in the amended text) and to a fine of no less than fifty thousand dirhams instead of one hundred thousand in the amended text or one of these two penalties, for whoever possesses, conceals or conducts any operation of funds when there is sufficient evidence or circumstantial evidences that their source is illegal.

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