A CLOSER LOOK AT FINANCIAL CRIME
As implied by the name, financial crime relates to criminal activity in relation to money or property of which someone else is the owner. It is predominantly to get monetary gains out of it, and the victim faces the losses that come along with it. With the advent of the latest technology, people all around the globe are facing the impact of financial crimes at different levels, depending upon their countries’ economic status.
Financial frauds or crimes invariably occur at various levels. It could be conducted through larger terrorist groups that are targeted at multinational corporations, or it could be through hackers who target individual systems such as laptops, mobile phones, or computers to hack them and derive financial gains from them. It can range from money laundering, dishonor of checks, forgery, fraud, tax evasion, insurance fraud, identity theft, and other forms of embezzlement in which the wrongdoer targets a victim and wrongfully deprives them of their money and/or property. It may also happen through third-party sources such as frauds in the financial sector, which include crimes related to a bank loan, credit card fraud, bribery, corruption, and other such related financial crimes.
In the UAE, the ambit of digital currencies is brought under the realm of law, which targets any hackers and also protects the users from any malpractices. The law has also recently introduced the niche concept of “controlled delivery,” which is also known as a form of a sting operation that allows the authorities to let the suspected money laundering activity proceed so that it enables assistance in the investigation and convicts the apprehended persons of carrying on with the crime.
During the last few years, there have been a few appointments made at the senior levels of financial regulators in the UAE financial free zones, the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), over the past year, along with the Financial Services Regulatory Authority (FSRA). These bodies are expected to take a more active approach to building and enforcing newer regulations related to the financial safety and functioning of these financial hubs. This will also help in the detection of financial crimes and the building of systems that will help find ways to counter them.
Such changes will bring about radical improvisations in the legal compliance environment in the UAE, essentially related to financial crimes as all activities would be going through a compliance risk assessment to ensure that they are not imminently exposed to the perils of the new technologies that the world is visualizing. All companies are devised to implement better adjustments and other such corrective measures that would prevent UAE-based companies from the risks of money laundering, terrorist-linked financing, and other financial crimes.
In 2021, the National Committee for Combating Money Laundering and Financing of Terrorism and Illegal Organisations (NAMLCFTC) adopted the Anti Money Laundering and Countering the Financing of Terrorism (AML/CFT) guidelines for financial institutions under the Chairmanship of Khaled Mohammed Balama and the Governor of the Central Bank of UAE. It has set to increase the rate of awareness amongst people with respect to financial crimes and finds relevance in the risks and penalties resulting from the violation. The delegates believe that their combined efforts would result in strengthening the ways that would result in combating financial crimes. The Committee has also approved an assessment report related to terrorism financing, money laundering, and other serious financial crimes. The operational and legislative standards would prioritize the recent risk that is being posed in the field of financial crimes and that would also boost the cooperation between the different authorities.
Financial crimes happen all around the world and it is not an issue specific to UAE. However, different jurisdictions have adopted more specific ways in which they can combat such crimes and also prevent the potential risks that arise from such crimes. Over time, the laws that punish the wrongdoers involved in such financial crimes have become stricter and these crimes now come under the ambit of a felony. The punishment for all such crimes may include imprisonment of up to 10 to 15 years along with a hefty amount of fine which may range from AED 10,000 TO AED 500,000 depending upon the degree of the crime that is being committed.
