Introduction In an increasingly interconnected world, combating financial crimes such as money :

laundering has taken centre stage in global regulatory initiatives. In alignment with these efforts, the United Arab Emirates (UAE) has established stringent anti-money laundering (AML) legislation to safeguard its financial system and bolster its reputation as a secure and reputable place to conduct business. As a chief legal officer at a leading Dubai-based law firm, I aim to shed light on these regulations and provide guidance on how companies can effectively navigate them. AML Regulatory Landscape in the UAE The UAE’s commitment to preventing money laundering is underpinned by several legislative instruments, primarily the Federal Law No. Among the relevant resolutions issued by the UAE Central Bank are the UAE Anti-Money Laundering and Combating Terrorist Financing Law of 2018, as well as relevant resolutions issued by the UAE Central Bank. In 2020, the UAE also introduced the Cabinet Decision No. 10 of 2019, which outlines controls to combat money laundering and terrorism financing. Together, these provide a comprehensive AML framework that aligns with the international standards set out by the Financial Action Task Force (FATF). The Anti-Money Laundering Laws in Detail A wide range of entities are subject to these laws, including banks, insurance companies, brokers, financial institutions, corporate service providers, and non-profit organizations, among others. They stipulate the establishment of internal controls, procedures, and policies to prevent and detect money laundering and terrorist financing.

Key provisions include:

1- Customer Due Diligence (CDD) Entities must verify the identity of their customers and, where applicable, the beneficial owner. For high-risk customers, Enhanced Due Diligence (EDD) procedures are required. 2- Risk Assessment Entities are required to undertake an ongoing risk assessment, including documenting and updating the identification and assessment of risks associated with their products, services, customers, and geographic locations. 3- Record Keeping Entities must retain documents and records related to customer identification and transactions for at least five years. 4- Suspicious Transaction Reporting Entities must promptly report any suspicious transactions or activities to the UAE’s Financial Intelligence Unit (FIU) irrespective of the amount involved. 5- Training Regular AML training must be conducted for employees so that they are aware of their responsibilities and obligations.

Introduction

During the past few years, the United Arab Emirates (UAE) has taken significant steps to reform its insolvency framework, addressing economic realities while providing robust legal solutions for businesses and individuals facing financial difficulties. As the Chief Legal Officer at a leading Dubai-based law firm, I am here to offer insights into the UAE’s bankruptcy and personal insolvency laws.

Bankruptcy Laws in the UAE

In 2016, the UAE introduced a new bankruptcy law, Federal Law No. 9 of 2016, providing a formal restructuring regime for businesses in financial distress, which was not present in the earlier legal framework. This law aims to support businesses facing financial difficulties, enabling them to restructure and continue operating instead of being forced into premature liquidation.

Key Aspects of the Bankruptcy Law:

1- Preventive Composition

This provision allows financially distressed but not insolvent businesses to reach a settlement with creditors, supervised by the court, while continuing operations.

2- Bankruptcy and Restructuring

If a debtor is insolvent or faces imminent insolvency, they can request bankruptcy and propose a restructuring plan to its creditors.

3- Bankruptcy and Liquidation

If restructuring isn’t feasible or the restructuring plan isn’t approved by the creditors, the court may order the liquidation of the debtor’s assets to pay off the debts.

Personal Insolvency Laws in the UAE

Recognizing the need for a legal framework addressing personal insolvency, the UAE enacted Federal Law No. 19 of 2019, known as the Insolvency Law. This law provides mechanisms for individuals facing financial difficulties, allowing them to settle their debts and offering them a fresh start without being subject to criminal prosecution.

Key Aspects of the Personal Insolvency Law:

1- Settlement of Debts

The law enables individuals to propose a debt settlement plan to their creditors, supervised by a court-appointed expert. If creditors representing at least two-thirds of the total debt approve the plan, it becomes binding on all creditors.

2- Insolvency and Liquidation

If a debt settlement plan is not possible, or if it fails, the debtor can file for insolvency. In most cases, the court will appoint a trustee to liquidate the debtor’s assets and distribute the proceeds to the creditors.

Advice on Navigating Bankruptcy and Personal Insolvency Laws

1- Engage Professional Assistance

Understanding and navigating bankruptcy and personal insolvency laws in the UAE can be complex. Engaging professional legal assistance can be crucial in effectively dealing with financial distress.

2- Early Action is Key

As soon as financial difficulties arise, businesses and individuals should take action. Delay can complicate matters and reduce the range of available options.

3- Communication with Creditors

Open and honest communication with creditors can often help manage their expectations and potentially lead to agreeable arrangements outside the formal legal process.

In Conclusion

Bankruptcy and personal insolvency laws in the UAE are designed to offer a lifeline to businesses and individuals facing financial hardship. While these laws provide much-needed options, navigating them can be challenging. It is highly advisable to engage experienced legal counsel to guide you through the process.

For personalized advice on your situation, please do not hesitate to contact our experienced team.

Disclaimer

(Disclaimer: Please note that the information provided in this article is for informational purposes only and does not constitute legal advice. We recommend that you seek the advice of a legal professional before making any decisions regarding insolvency and bankruptcy.)