Ministry of Economy to impose penalties for non-compliance with ultimate beneficial owner procedures
The Ministry of Economy has adopted additional steps to ensure the compliance of establishments registered in the UAE with the submission and the availability of ultimate beneficial owner information, to strengthen the UAE’s regime in anti-money laundering and combating terrorism financing. As part of these measures, the licensing authorities in all emirates and in the commercial free zones have been given the authority to impose administrative penalties and fines on non-complying establishments that fail to adhere to the ultimate beneficial owner requirements under the Cabinet Resolution (58) of 2020, regulating the Ultimate Beneficial Owner Procedure on or before June 30, 2021.
The implementation of penalties for non-compliance will start on July 1, 2021 with a written warning, followed by a fine of AED 100,000 in the event of repetition and non-compliance. Additional administrative penalties, including the suspension of the license for a period of one year or restrictions on the powers of the board of directors, services provided to establishments, might also be imposed.
The Ministry indicated the readiness of the teams assigned around the clock to take organizational and awareness measures to reach the target ratios, underlining its readiness to provide all technical support and guidance to achieve the highest levels of compliance by all establishments in the country before the end of this month. It further highlighted its keenness to address inquiries through its call centre or to communicate with the economic departments and commercial free zones in the country.
The latest move contributes to strengthening concerted efforts and integration of roles between federal and local authorities to ensure full compliance of the establishments, thus raising the level of transparency in the country’s business environment. Additionally, it consolidates the UAE’s position as a competitive economic hub that follows the highest standards of integrity and transparency in the field of financial and commercial controls and confronting unhealthy practices in business activities.
In a statement, the Ministry revealed that the compliance rate of establishments with regard to providing ultimate beneficial owner data reached 62.1 percent so far (284,129 establishments in the country). The Ministry further confirmed its continuation of coordination with establishments’ licensing authorities, which include local economic departments and commercial free zone authorities, to ensure the readiness of their registration systems to provide the ultimate beneficial owner information and to ensure its quality and accuracy in accordance with the requirements of Cabinet Resolution No. 58 of 2020 on the regulation of the ultimate beneficial owner procedures.
The Ministry explained that the submission of ultimate beneficial owner data is a necessary step to effectively disclose and reveal the complex structures related to the chain of ownership and its beneficial owner in licensed establishments in the UAE. This will raise the level of transparency in the economic environment and meet the country’s obligations towards relevant international organizations.