Money laundering is the illegal process of concealing the origins of money obtained illegally by passing it through a complex sequence of banking transfers or commercial transactions. The overall scheme of this process returns the money to the launderer in an obscure and indirect way.
Money obtained from certain crimes, such as extortion, insider trading, drug trafficking, and illegal gambling is “dirty” and needs to be “cleaned” to appear to have been derived from legal activities, so that banks and other financial institutions will deal with it without suspicion. Money can be laundered by many methods, which vary in complexity and sophistication.
In the United Arab Emirates, money laundering is committed by the following: 1) Transferring or moving proceeds or conducting any transaction with the aim of concealing or disguising there illegal source; 2) Concealing or disguising the true nature, source or location of the proceeds as well as the method involving there disposition, movement, ownership of or rights with respect to said proceeds; 3) Acquiring, possessing or using upon receipt; and 4) Assisting the perpetrator of the predicate offense to escape punishment.
FINANCIAL TERRORISM, how it is committed?
Federal Law No. 20 of 2018 states that any acts specified in clause 1 of article 2 of the law (act of committing money laundering), if he/ she is aware that the proceeds are wholly or partly owned by a terrorist organization or terrorist person or intended to finance a terrorist organization, a terrorist person or a terrorism, even if without the intention to conceal or disguise the illicit origin; and by providing, collecting, preparing, obtaining proceeds or facilitating the obtainment by others with intent to use such proceeds, or while knowing that such proceeds will be used in whole or in part for the benefit of an illegal organization or of any of its members, with the knowledge of its true identity or purpose.
In both instance, perpetrator shall be sentenced to imprisonment for a period not exceeding ten years and to a fine of no less than AED 100,000 and not exceeding AED 5,000,000.