Get ready to face fines of up to Dh100,000 in case of ‘ultimate beneficial owner’ rules violations

Dubai: UAE has launched a campaign to ensure 513,000 non-financial businesses, regulated by 38 licensing authorities, provide data on ultimate beneficial owners.

“Money laundering and terrorism financing crimes are a major concern that plagues most of the world’s economies, especially today with the advent of modern digital technologies in the financial sector, trade and investment activities and doing business,” said Safeya Al Safi, Director of the Anti-Money Laundering Department at the Ministry of Economy.

The ultimate beneficial owner (UBO) is the person who, directly or indirectly, owns and controls a company. Individuals with ownership of at least 25 per cent shares and voting rights of a company, or someone with the power to dismiss and appoint a majority of a company’s directors shall be considered as a UBO.

Ahmed Al Hosani, Director of the Commercial Registration and Certificates of Origin Department, said that ultimate beneficial owner procedures are key elements in UAE’s approach to curb money laundering and financing of terrorism and illegal organizations and financing the spread of weapons of mass destruction.

Al Hosani added that the Ministry’s campaign included an awareness campaign dedicated to raising awareness among private sector establishments about the importance of submitting ultimate beneficial owner data to the licensing authorities as a mandatory legal requirement that must be complied with, to avoid penalties and fines.

Fines involved

The campaign will continue till the end of June 2021 as part of efforts to raise more awareness in this regard.

Following this, starting from July 1, 2021, the penalties stipulated in the Cabinet Resolution No. 53 of 2021 on the Administrative Penalties Against Violating ultimate beneficial owner procedures will come into effect.

These include the issuance of written warnings up to imposing Dh100,000 in fines in the event of recurrence and continued noncompliance, along with additional administrative penalties, including, among others, license suspension for one year, and restrictions on board of directors’ authority.

How to comply?

Private sector establishments can submit ultimate beneficial owner data in 3 simple steps

• Creating a register of their ultimate beneficial owner data and maintaining the same within their documents, so that this register is treated like the memorandum of association, internal regulations and the rest of the main documents of the establishment. Accordingly, the aforementioned register shall be exhibited upon the request of concerned entities and individuals. In this respect, licensing authorities have provided forms stating all the details and information to be listed in the Ultimate Beneficial Owner Register, and these forms are available on the concerned authorities’ official websites as well.
• Submission of an undertaking to create the registry and ensure the accuracy of its data to the licensing authority to which each establishment is answerable to. This step gives the opportunity for establishments with complex structures to start the procedures for determining their ultimate beneficial owner and keep them in the addresses registered with the licensing authority and submit their data to the competent authorities. This undertaking is submitted online through the official websites of the respective licensing authority.
• Entering the ultimate beneficial owner data in the systems of licensing authorities through dedicated web pages on their official websites. Therefore, every establishment should constantly check the official website of its licensing authority and communicate with it in this regard as soon as possible, to avoid penalties.