Fines and Penalties to be Imposed on Non-Submission of UBO Information
The Ministry of Economy (MoE) said on Tuesday, 22 June 2021, that that it has adopted additional measures to ensure that firms operating in the UAE comply with the requirements relating to submission and making available any type of information regarding the ultimate beneficial owners (UBO)
This decision is part of the strategy to strengthen the United Arab Emirates (UAE) anti-money laundering and countering terrorism financing drive.
According to the new measures, the authorities that are responsible for providing licenses to businesses in all the free zones as well as the mainland UAE, have been given the power to impose fines and penalties on business establishments that fail in complying with the UBO requirements, the Ministry of Economy said in a statement.
The implementation of fines and penalties on business establishments showing non-compliance will begin from 1 July, 2021.
Around 62% of business establishments in the UAE so far had complied with the aforementioned requirement while around 38% are still yet to implement UBO procedures before the deadline of 30 June, 2021. It is important to note that keeping the UBO register updated is eminently important for all the relevant entities in the UAE to avoid heavy fines.
The MoE has said that this move will help in strengthening concerted efforts as well as integration of roles between local and federal authorities to ensure that all the establishments operating in the UAE show full compliance, thus increasing the level of accountability and transparency in UAE’s business environment.
The ministry also said that this decision will help in strengthening UAE’s efforts in developing the anti-money laundering and countering terrorism financing system. Further, this decision will consolidate UAE’s position as a competitive business center that follows the highest standards of integrity, accountability and transparency with regards to financial and other operational controls and confronting illegal and unhealthy business practices.
The Ministry also said that it held multiple online workshops for the 38 licensing authorities within the UAE to discuss issues, challenges, share experiences and provide more awareness. The ministry has reviewed results and experiences of some of the licensing authorities with reference to awareness initiatives for business establishments, educating employees, and creating online systems to ensure highest levels of compliance with the new UBO requirements.
Last, the ministry said that these steps and initiatives would benefit the business and investment sector, and these will also help in enhancing UAE’s economic stability and security and will contribute to attracting and facilitating foreign direct investment as well as protecting businesses from corruption and financial crimes.