UAE Corporate Criminal Law Updates

The United Arab Emirates (the “UAE”) continues to lead the Arab world in terms of the fight against bribery and corruption (“ABC”). The UAE offers a business-friendly environment with an effective and efficient public administration; it criminalizes active and passive bribery, embezzlement, abuse of office and facilitation payments, it enforces its national ABC legislation and it continues to work with international partners to combat bribery. wine and corruption.

Transparency International Corruption Perceptions Index

Transparency International, a non-profit, non-governmental civil society organization that leads the international fight against corruption, publishes an annual Corruption Perceptions Index (“CPI”) which ranks 180 countries around the world according to perceived levels corruption in the public sector. Transparency International determines the CPI ranking through expert assessments and opinion polls. It then assigns each country a score ranging from zero (representing a high level of corruption) to 100 (representing no corruption). Using these scores, Transparency International then ranks each country from 1 to 180.

UAE Historical Rankings

In 2002, Transparency International first ranked the United Arab Emirates 37th out of 133 countries. In 2019 and 2020, the United Arab Emirates ranked 21st out of 180.

Most recently, in 2021, the United Arab Emirates ranked 24th. Although down slightly from previous years, the UAE maintained its position as the least corrupt country in the Middle East and North Africa (“MENA”) region and continues to top many other non-MENA countries, including the United States, South Korea, Spain, Portugal and Italy.

Recent ABC Updates

We have previously written about the UAE’s modernization of its ABC legislation, which brought it into line with regimes developed in other jurisdictions. See, for example, our previous blog post here, which outlines the main features of the new law.

In this article, we look at some of the other positive steps the UAE has taken in recent times to continue the fight against bribery and corruption, which would not have been captured by the CPI since the CPI only measures perceived corruption in the public sector.

Application activity

First, we concluded our previous article by predicting that the modernized law portends increased enforcement activity, and a number of recent lawsuits seem to suggest that this prediction has come true.

For example, an investor was jailed for a year for offering a bribe of AED 10,000 to a customer service employee at a government center.

The investor wanted the official to transform the investor’s company from a management consulting firm into an investment fund manager without presenting the necessary documentation. The official did not accept the bribe but instead reported it to the Department of Economic Development and the Dubai Police.

Reform of financial secrecy and money laundering

Secondly, and similar to the overhaul of the UAE’s ABC legislation, the UAE has also undertaken a series of actions to develop and deploy a sophisticated financial crime compliance framework that is in line with the Group’s expectations and recommendations. Financial Action (“FATF”), an intergovernmental decision-making body whose purpose is to set international standards, and to develop and promote policies, both nationally and internationally, to combat money laundering and the financing of terrorism.

For example, the United Arab Emirates published a new Anti-Money Laundering and Anti-Terrorist Financing (“AML/CFT”) Act in October 2018 (see our analysis here), which established an Executive Office of AML/CFT to oversee the implementation of the UAE National AML/CFT Strategy and National Action Plan and a new specialized court to focus on anti-money laundering (see our analyzes here), and it issues periodic guidance to financial institutions and designated non-financial businesses and professions (known as “DNFBPs”) on how best to comply with the law (see for example our analysis of the guidance of June 2021 on reporting suspicious activities/transactions here).

Private sector reform

Third, the UAE has introduced reforms in practices and transparency in the declaration and registration of beneficial interests and appointed directors.

In short, Cabinet Resolution No. (58) of 2020 Regulating Beneficial Ownership Procedures (the “Resolution”) introduced new requirements for UAE entities to disclose their beneficial owners. The main objective of the resolution is to enhance the transparency of entities registered in the UAE, improve corporate governance and prevent financial fraud and tax evasion.

Additional Considerations

Acting on an international warrant issued by South Africa for bribery, corruption and misappropriation of state assets, Dubai police recently arrested Atul and Rajesh Gupta. They are now awaiting extradition under a 2018 extradition treaty between the two countries, ratified in 2021. Even more recently, the United Arab Emirates announced its intention to sign seven new extradition agreements this year in order to combat against corrupt activities.

These measures underscore a concerted push by the United Arab Emirates to prevent its misuse by financial criminals seeking to protect illicit funds.

© Copyright 2022 Squire Patton Boggs (USA) LLPNational Law Review, Volume XII, Number 257