Legal Framework

United Arab Emirates and United Nations Legal Framework for Economic Sanctions

The United Nations Security Council (UNSC) holds the capacity to take action in seeking to maintain or restore international peace and security under Chapter VII of the United Nations Charter, including by imposing sanctioning measures under Article 41, which encompass a broad range of enforcement options that do not involve the use of armed force. The UNSC has the authority to issue binding resolutions on United Nations (UN) member states.

The United Arab Emirates (UAE), as a member of the UN, is committed to implement the United Nations Security Council Resolutions (UNSCRs), including those related to UN sanctions regimes. Consequently, through the Cabinet Resolution No. 74 of 2020, the UAE is implementing UNSCRs on the suppression and combating of terrorism, terrorist financing & countering the financing of proliferation of weapons of mass destruction, in particular, targeted financial sanctions (TFS) regimes as defined by the UN. 

Security Council sanctions have taken several different forms, in pursuit of a variety of goals. The measures have ranged from comprehensive economic and trade sanctions to more targeted measures such as arms embargoes, travel bans, and financial or commodity restrictions. The Security Council has applied sanctions to support peaceful transitions, deter non-constitutional changes, constrain terrorism, protect human rights and promote non-proliferation of weapons of mass destruction (WMDs).

As stated above, the UN sanctions regimes include different measures that countries must apply; however the following explains only how to implement in the UAE the targeted financial sanctions related to the freezing measures and prohibition to provide funds and services in accordance with the following UNSCRs. Individuals and legal entities in the UAE should also refer to relevant rules, regulations, and guidance published by the Supervisory Authorities and the UN Security Council.

Terrorism and terrorist financing:

1. Islamic State in Iraq and the Levant (Da’esh), Al-Qaida, and associated individuals, groups, undertakings, and entities. UNSCR 1267 (1999), 1989 (2011) and its successor resolutions
2. The Taliban, and associated individuals, groups, undertakings, and entities. UNSCR 1988 (2011) and its successor resolutions
3. Any individual or entity designated by the United Arab Emirates (Local Terrorism List’). UNSCR 1373 (2001)

The financing of proliferation of WMDs:

1. Democratic People’s Republic of Korea (DPRK): nuclear-related, other weapons of mass destruction-related, and ballistic missile-related programs. UNSCR 1718 (2006) and its successor resolutions
2. Islamic Republic of Iran: nuclear program UNSCR 2231 (2015)

Other UN sanctions regimes with Targeted Financial Sanctions:

1. Somalia UNSCR 1844 (2008)
2. Iraq UNSCR 1483 (2003)
3. Congo UNSCR 1596 (2005) & UNSCR 1807
4. Related to the involvement of terrorist bombing in Beirut (2005) UNSCR 1636 (2005)UNSCR 1701 (2006)
5. Libya UNSCR 1970 (2011)
6. Central African Republic UNSCR 2127 (2013)
7. Yemen UNSCR 2140 (2014)
8. South Sudan UNSCR 2206 (2015)
9. Mali UNSCR 2374 (2017)

The Cabinet Resolution No. 74 of 2020 sets the procedure to implement the Targeted Financial Sanctions of the UNSC, in particular those related to the Combating of Terrorism, Terrorists Financing & Financing Proliferation of Weapons of Mass Destruction.

The rules and regulations apply to all applicable individuals and legal entities in the UAE. For further information on TFS obligations, individuals and legal entities in the UAE should refer to the guidance published by the Executive Office and Supervisory Authorities.

Local Terrorist List

Overview

All UN member states must implement freezing measures with regards to individuals or legal entities designated by the UNSC. In addition, UNSC Resolution 1373 (2001) mandates each UN member state to develop the procedures to identify and apply freezing measures with regards to individuals or legal entities that are suspected of, attempt to, and/or commit terrorist acts.

In the UAE, the Supreme Council for National Security (Supreme Council) prepares such designations. Specifically, the Supreme Council proposes a Local List that meets the designation criteria required by UNSC Resolution 1373 (2001). The Supreme Council can include individuals or legal entities in that list without prior notice, and irrespective of whether criminal proceedings exist. Each listing must be approved by the Cabinet of the UAE.

International cooperation pursuant UNSCR 1373 (2001)

Sending a designation request

The Supreme Council may unilaterally request a foreign country to designate and/or to apply freezing measures to an individual or legal entity that meets the criteria for listing under UNSC Resolution 1373 (2001). The listing proposal may include the following:

    1. Specific information establishing links to terrorist individuals, and legal entities or activities or otherwise establishing that the individuals or legal entities meet the designation criteria.
    2. Evidence or documents supporting the listing proposal, such as reports of law enforcement authorities, security authorities, the judiciary, media, or others.
Receiving a designation request

Any foreign country may request the Supreme Council to include in the Local List an individual and legal entity that is suspected or believed to meet the designation criteria under UN Security Council Resolution 1373 (2001).

The Supreme Council shall determine without delay whether it is satisfied that the proposed designee meets these designation criteria and present it for consideration and decision to the Cabinet.

Updating & Re-listing

The Supreme Council shall conduct periodic reviews of the Local List, in coordination with the Ministry of Justice and based on information from Law Enforcement Authorities (LEAs) and other relevant agencies in the UAE.

If the Supreme Council considers that there are no longer reasonable grounds to believe that an individual or legal entity in the Local List meets the designation criteria, the Supreme Council shall de-list that individual or legal entity after approval by the Cabinet.

Documents

UNSC Resolution 1373
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Sanctions Implementation

Overview

Targeted financial sanctions must be implemented in accordance with the relevant UNSC Resolutions, including the UN Consolidated List, and the Local Terrorist List.

There are four main obligations on all persons, natural or legal in the UAE to implement Targeted Financial Sanctions (TFS):

All natural and legal persons in the UAE must comply with the following general obligations:

Step-1 Subscribe: Subscribe to the Executive Office Notification System to receive automated email notifications on any updates to the Sanctions Lists ( Local Terrorist List or UN Consolidated List)

Step-2 Screen: Undertake regular and ongoing screening on the latest Local Terrorist List and UN Consolidated list. Screening must be undertaken in the following circumstances:

  1.  Upon any updates to the Local Terrorist List or UN Consolidated List. In such cases, screening must be conducted immediately and without delay to ensure compliance with implementing freezing measures without delay (within 24 hours).
  2.  Prior to onboarding new customers.
  3.  Upon KYC reviews or changes to a customer’s information.
  4.  Before processing any transaction.

Step-3 Apply Targeted Financial Sanctions: 

  1. Freezing of all funds:Freeze, without delay (within 24 hours) and without prior notice, all the funds:
    • Owned or controlled, wholly or jointly, directly, or indirectly, by an individual or legal entity designated by the UAE Cabinet or pursuant to a relevant UNSC Resolution.
    • Derived or generated from funds under item (a); or
    • Individuals or legal entities acting on behalf of or at the direction of an individual or legal entity designated by an individual or legal entity designated by the Local Terrorist or pursuant or the United Nations consolidated list. 
  2. Prohibition of making funds available:  No individual or legal person in the UAE is permitted to provide funds to or render financial services or other services related to, whether in whole or in part, directly or indirectly, or for the benefit of any individual or legal entity listed in the Local Terrorist List or the UN Consolidated List pursuant to a relevant UNSC Resolution.  

Certain exceptions may apply, upon submitted request and written authorization from the Executive Office of the Committee for Goods and Materials Subject to Import and Export Control, applicable authority, or in accordance with Cabinet decisions.

  • Interest, profits, or other earnings due on the account; and
  • Payments due under contracts, agreements or obligations agreed upon prior to the date on which the individual or legal entity was designated, provided such additions are immediately frozen, and the respected Supervisory Authority is informed immediately.

Step-4 Report: FIs, DNFBPs, and VASPs should report any freezing or suspension measures taken upon identifying confirmed or potential matches through the goAML platform within five (5) days from taking such measures.

For non goAML users (Persons that do not fall under the definition of FIs, DNFBPs, or VASPs and are therefore not under an obligation to register on goAML), reporting should be made by sending an email to the Executive Office through iec@uaeiec.gov.ae

Who is the target of these measures?

The freezing measures, including the prohibition of making funds available, apply to:

  1. Any individual, group, or legal entity listed in the Local Terrorist List defined by the Federal Cabinet or listed by the UNSC in its Consolidated Sanctions List.
  2. Any legal entity, directly or indirectly owned or controlled by an individual or legal entity listed under A.
  3. Any individual or legal entity acting on behalf of or at the direction of any individual or legal entity listed under A & B.

Important: FIs, DNFBPs, and VASPs are obligated to apply freezing measures on entities which are majority owned by designated individuals or entities.In implementing TFS, the criterion to be taken into account when assessing whether a legal entity is majority owned by a designated individual or entity is the possession of more than 50% of the proprietary rights of the legal entity or having a controlling interest in it. If this criterion is satisfied, it is considered that the legal entity or arrangement is owned by another individual or entity and is subject to freezing measures.

FIs, DNFBPs, and VASPs should apply freezing measures in cases in which a designated person holds a minority interest, if there is evidence that the designated person exerts control over the legal entity (despite owning a minority interest). The criteria to be taken into account when assessing whether a legal entity is mainly controlled by another person or entity, alone or pursuant to an agreement with another shareholder or other third party is mentioned in the Guidance on Targeted Financial Sanctions.

How to identify a match to apply TFS?

FIs, DNFBPs, and VASPs in the UAE (including free zones) must screen constantly their customers, potential customers, beneficial owners, and transactions to identify possible matches to the Local Terrorist List or UN Consolidated List. Both Lists contain a range of information to aid the identification of a designated individual or legal entity, the following are examples of the information contained in the lists:

For natural person For legal person
  • Name
  • Aliases
  • Date of birth
  • Nationality
  • ID or passport information
  • Last known address
  • Name (s)
  • Aliases
  • Address of registration
  • Address of branches
  • Other information

 

Because many names are very common, you may find various potential matches. However, it does not necessarily mean that the individual or legal entity you are dealing with is subject to TFS.

When identifying the potential match, by taking into consideration the knowledge you have of the customer, potential customer, beneficial owner, or transaction, through the customer due diligence and/or using reasonable information (e.g., open-source information, media articles, commercial databases, etc.), you must cross-check your customer’s data with the identifiers published on the Sanctions Lists. If you are satisfied that the individual, entity, or group is not the designated individual, entity, or group, i.e. a ‘False Positive Result’, then you do not need to implement any TFS measures. You may allow the transaction or business to continue its normal course, and you are required to maintain evidence of this process in your records.

If you are unable to internally verify whether the ‘potential match’ is a false positive result or a confirmed match, then you must suspend any transaction and report the case to the Executive Office and the relevant Supervisory Authority and uphold the suspension measures until a response is received from the Executive Office on the status of the potential match (whether false positive or confirmed match). 

If the individual, entity, or group matches all of the key identifiers published on the Sanctions Lists, then the result is considered a ‘confirmed match’. In case the confirmed match is an existing customer, you must freeze without delay, refrain from offering any funds or other assets or services and report the freezing measures to the Executive Office and the relevant Supervisory Authority within five business days from taking any freezing measure and/or attempted transactions. In case the confirmed match is a potential customer, you must reject the transaction immediately and report the case.

Potential Match A potential match is when there is a partial match between identifiers in the Sanctions Lists with any information in your databases, and you are unable to conclude a false positive or a confirmed match.
Confirmed Match A confirmed match is when an individual, entity, or group matches all of the key identifiers published on the Sanctions Lists.
False Positive Result A false positive is a potential match to listed individuals, entities, or groups, either due to the common nature of the name or due to ambiguous identifying data, which on examination proves not to be a confirmed match.

The designated individuals, groups, or legal entities can be found in the following links:

Local Terrorist List
 

Download PDF File

 

Download Excel File

United Nations Security Council Consolidated List
 

Download PDF File

 

Download XML File

 

Download HTML File

Changes to the lists
 

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Liability

A Person who, in good faith, freezes funds, denies disposal thereof, or refuses to provide financial services relating to listed individual, group or entity, or declined to perform any other obligation in compliance with the provisions of Cabinet Resolution No. 74 of 2020 shall be exempt from any damages or claims, resulting from such actions, including penal, civil, and/or administrative liability.

Freezing Measure Duration

Asset freezing and prohibition measures have no time limit: : the funds must remain frozen, and the prohibition to offer funds and services stands until the individual, group, or entity is removed from the Local Terrorist List or the UN List or until there is a freezing cancellation decision made by a competent authority or the UN Sanctions Committee.

Other Measures

UNSC resolutions and Cabinet Resolution may include other Sanction measures, such as prohibitions relating to travel, delivering weapons, imports, or provision of fuel supplies and other. Such measures must be implemented as well.

Additional Obligations of Financial Institutions and DNFPBs

Implement the freezing cancellation decision Without delay, pursuant to Related UN Security Council Resolutions or decisions of the Cabinet regarding issuance of Local Terrorist List, and notify the Supervisory Authority and the Executive Office.
Immediately notify Notify within five business days, the relevant Supervisory Authority and the Executive Office in the following cases and include the following information:
  1. Identification of targeted funds - the actions that have been taken as per requirements of related UNSC Resolutions or decisions of the Cabinet regarding issuance of Local Lists, including concerning attempted transactions.
  2. Detection of any match with listed individuals or legal entities - details of its data and the actions that have been taken as per requirements of related UNSC Resolutions or decisions of the Cabinet regarding issuance of Local Terrorist Lists, including concerning attempted transactions.
  3. If it was found that one of its previous customers or any occasional customer it dealt with, is listed on the Sanctions List or the Local Lists.
  4. If there is any indication that one of its customers or former customers, or a person it has business dealings with, is a individual listed on the UN Sanctions List or the Local List or has a direct or indirect relationship with a Listed individual.
  5. Similarity of names (notify even if no action has been taken / inability to remove such similarity through available or accessible information).
Implement internal controls and procedures Set and effectively implement internal controls and procedures to ensure compliance with the obligations arising from the Cabinet Resolution No. 74 of 2020.
Implement policies and procedures Set and implement policies and procedures that prohibit staff from, directly or indirectly, informing the customer or any third party that freezing action shall be implemented as per provisions of the Cabinet Resolution No. 74 of 2020.
Cooperate Cooperate with the Supervisory Authority and the Executive Office in verifying accuracy of presented data.

Supervision

Certain legal entities, notably Financial Institutions (FIs), Designated Non-Financial Businesses and Professions (DNFBPs), and Virtual Asset Service Providers (VASPs) must comply with specific requirements promulgated under article 21 of Resolution 74. Supervisory Authorities will supervise and in case of identifying a non-compliance, they can apply the enforcement actions set out under the Federal Decree Law AML/CFT (20/2018) and its amendments.

Documents

Typologies & Redflags
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Sanction Evasion

Overview

Sanctions Evasion is any attempt to disguise or conceal the involvement of sanctioned individuals, entities, or groups in a transaction or series of financial or non-financial transactions or services to avoid financial sanctions imposed by United Nations or Local Terrorist List.

FIs, DNFBPs, and VASPs should ensure to apply proactive measures to identify sanction evasion transactions through understanding the emerging threats and vulnerabilities that can be abused by terrorist financers or proliferators, conducting proper CDD and maintaining up to date sanctions lists, raising awareness of sanction evasion techniques and submitting suspicious PF or TF transactions to the FIU via goAML.

In order to combat sanction evasion schemes, the private sector should work closely with the public sector by building private public partnerships and effective interagency cooperation and sharing of information.

Sanction Evasion’s Red Flags and Typologies

The EOCN As a focal point for implementing the Targeted Financial Sanctions published a list of Red flags and typologies which aims to assist the private and public sectors to identify suspicious transactions related to sanction evasion. The EOCN encourages the private sector to integrate these red flags within their alerting systems as a part of internal controls for combating TF and PF sanction evasion. These red flags were prepared following thorough analysis of the TF and PF cases that occurred in the UAE and other regional countries as follows:

TF - Sanction Evasion Red flags and Typologies
  • Carrying out cash withdrawals in short succession (potentially below the daily cash reporting threshold) across various locations in territories where sanctioned people have influence or are on the border of sanctioned countries.
  • Funds are sent or received via international transfers from or to higher-risk locations.
  • Foreign exchange transactions are performed on behalf of a customer by a third party, followed by funds transfers to locations having no apparent business connection with the customer or to higher-risk countries.
  • The use of multiple personal and business accounts or the accounts of non-profit organizations or charities to collect and funnel funds to a small number of foreign beneficiaries.
  • Transactions involve individual(s) or entity(ies) identified by media and/or Sanctions List as being linked to a terrorist organization or terrorist activities.
  • Individual or entity’s online presence supports violent extremism or radicalisation.
  • Irregularities during the CDD process which could include, but is not limited to:
    • Inaccurate information about the source of funds and/or the relationship with the counterparty.
    • Refusal to honour requests to provide additional KYC documentation or to provide clarity on the final beneficiary of the funds or goods.
    • Suspicion of forged identity documents
  • Transactions involve individual(s) or entity(ies) identified by media and/or Sanctions List as being linked to a terrorist organization or terrorist activities.
  • The use of funds by a non-profit organization is not consistent with the purpose for which it was established.
  • Client donates to a cause that is subject to derogatory information that is publicly available (e.g., crowdfunding initiative, charity, non-profit organization, non-government organization, etc.).
PF - Sanction Evasion Red Flags and Typologies
  • Dealings, directly or through a client of your client, with sanctioned countries or territories where sanctioned persons are known to operate.
  • The use of shell companies through which funds can be moved locally and internationally by misappropriating the commercial sector in the UAE.
  • Dealings with sanctioned goods or under embargo. For example:
    • Oil or other commodities
    • Dual-Use items (wire nickel, inverters, etc.)
  • Identifying documents that seemed to be forged or counterfeited.
  • Identifying tampered or modified documents with no apparent explanation, especially those related to international trade.
  • The activity developed or financed does not relate to the original or intended purpose of the company or entity. For example:
    • For companies, they are importing high-end technology devices, but they are registered as a company that commercializes nuts.
    • For a non-profit organization, they are exporting communication devices, but they are an entity aimed to provide health services.
  • Very complex commercial or business deals that seem to be aiming to hide the final destiny of the transaction or the good.
  • Complex legal entities or arrangements that seem to be aiming to hide the beneficial owner.

Sanction Evasion Reporting

Pursuant to Article (9) of Federal Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organisations. Sanction Evasion Reports should be submitted to the UAE FIU as Suspicious Transaction Reports (STR).

FIs, DNFBPs, and VASPs should be able to differentiate between the cases that require submitting a FFR/PNMR or submitting an STR/SAR.

Any suspicious transactions or activities that do not include confirmed or potential matches to the UAE Local Terrorist List or UN Consolidated List should be reported to the FIU by raising a STR/SAR through the goAML platform. Alternatively, cases that involve a confirmed or potential matches to the UAE Local Terrorist List or UN Consolidated List should be reported to the Executive Office by raising a FFR/PNMR.

The Table below summaries the difference between FFR/PNMR and STR/SAR.

Fund Freeze / Partial Name Match Reports
received by Executive Office
Suspicious Transaction / Activity Reports
received by UAE FIU
Confirmed match to be a designated person Identified red flags or reasons to report
Potential match to be a designated person Does not include confirmed or potential match to a designated person
Relationship to designated person or party with documented evidence (e.g. POA) Suspected relationship to a designated person or party to circumvent sanctions

UAE Government Authorities Role

Supervisory Authorities

  • Screen the internal data bases against the Local Terrorist List and UN List and take any appropriate action when identifying a match. 
  • Take freezing measures or any other action to implement TFS. 
  • Supervise reporting legal entities to verify their compliance with these obligations and measures.
  • Apply enforcement actions including administrative fines in case of non-compliance.

Law Enforcement

  • Provide any information regarding the outcome of the freezing or implementation of other sanctions, such as travel ban, embargoes, commercial measures, and others within five business days to the Executive Office.

Executive Office of the Committee for Goods and Materials Subject to Import and Export Control (Executive Office).

  • Act as a central authority to ensure implementation of Targeted Financial Sanctions in the UAE
  • Receive and process grievances against listing in UN and Local Lists decisions
  • Receive and process applications to use frozen funds as per Sanctions Lists
  • Work closely with the Supreme Council with regard to the local listing.
  • Circulate updates to the local and UN lists to the government and private sector
  • Coordination and exchange of information between Government Agencies.

Grievances and Requests

Request a Freezing Cancellation

Assets frozen due to the Local List

Any individual or legal entity with a name identical or similar to a listed name, and any person who has been adversely affected by a sanctions listing can submit a written application to the Executive Office for unfreezing or cancellation of any other measures taken against him. Such application must be accompanied by all supporting documents.

To make an application to lift the freezing, fill this form and attach all supporting documents to substantiate your claim. Send the request to: iec@uaeiec.gov.ae

The Executive Office shall refer the application to the Supreme Council for its consideration. The Supreme Council shall issue its decision, within thirty (30) days from the date of receipt of application. The Executive Office will notify the applicant of the result in writing.

Grievances to the court: In case the application was rejected by the Council or remained without response thereto within thirty (30) days from the date of its submission, the applicant may file a grievance at the Competent Court within sixty (60) days from the date on which he was notified of the rejection of the application, or after a lapse of the response period.

The court’s decision on the grievance shall be incontestable, and if the court ruled to reject the grievance, a new grievance may only be filed after six (6) months from the date of rejection of the grievance, unless a serious reason acceptable to the chairman of the court arises before the expiry of such period. A challenge to the freezing and Other Measures decision will not be accepted before a request against it was filed and rejected, or the period for responding to it had lapsed, as stated above.

Assets Frozen due to the UN Sanctions Lists

Any individual or legal entity with a name identical or similar to a name in the list, and any person who has been adversely affected by a sanctions listing can submit a written application to the Executive Office for unfreezing or cancellation of any other measures taken against him. Such application must be accompanied by all supporting documents. Send the form request to: iec@uaeiec.gov.ae

The Office will examine the application, and to decide, it may ask for any clarifications or additional documents from the applicant, the UN Security Council, the relevant Sanctions Committee, or any other party.

The Office shall issue its decision to reject or approve the request to lift the freezing measures within thirty (30) days from the date of receipt of the application and shall notify the applicant accordingly.

Grievances to the court: In case the application was rejected by the Office or remained without response thereto within thirty (30) days from the date of its submission, the applicant may file a grievance at the Competent Court within sixty (60) days from the date on which he was notified of the rejection of the application, or after a lapse of the response period.

The court’s decision on the grievance shall be incontestable, and if the court ruled to reject the grievance, a new grievance may only be filed after six (6) months from the date of rejection of the grievance, unless a serious reason acceptable to the chairman of the court arises before the expiry of such period. A challenge to the freezing and Other Measures decision will not be accepted before a request against it was filed and rejected, or the period for responding to it had lapsed, as stated above.

Permission to Use Frozen Funds

Assets frozen due to the Local Terrorist List

An individual or legal entity listed in the Local List, or his legal representative, and any stakeholder may submit to the Executive Office a written request for accessing all or part of the frozen funds. Such request will be referred to the Ministry of Justice. Send the request form to iec@uaeiec.gov.ae

Following coordination with the Supreme Council, The Ministry of Justice may approve the use of part of the frozen funds of an individual or legal entity listed in Local List for any of the following purposes:

  1. To cover necessary or basic expenses, such as the amounts payable for foodstuffs, rent, mortgage, medicine, medical treatment, insurance premium, educational and judicial fees, and public utility fees.
  2. To pay professional fees and costs relating to rendered legal services and other exceptional expenses within reasonable limits, or services relating to safekeeping or management of frozen funds.
  3. Extraordinary expenses if and as approved, on a case-by-case basis, by the Ministry of Justice.

The Executive Office will notify the applicant, in writing, of the outcome decision related to the approval or rejection of the request.

Grievances to the court: In case the application was rejected or remained without response thereto for thirty (30) days from the date of its submission, the applicant may file a grievance at the Competent Court within thirty (30) days from the date on which he was notified of the rejection of the request, or after a lapse of the response period.

A challenge to the rejection of the request decision shall not be accepted before a grievance against it was filed and rejected, or the period for responding to it had lapsed, as stated above.

Assets Frozen due to the UN Sanctions Lists

Any individual, entity, or group affected by a freezing measure may submit a written request to unfreeze all or part of the funds or other assets to the Executive Office. This request must be submitted by the affected person or his/her legal representative, accompanied by all supporting documents. Send the request form to iec@uaeiec.gov.ae

The Executive Office may approve the request for access to funds frozen as per the UN List, in the following cases:

Basic Expenses:

  1. To cover necessary or basic expenses, such as the amounts payable for foodstuffs, rent, mortgage, medicine, medical treatment, taxes, insurance premiums, educational and judicial fees, and public utilities fees.
  2. To pay professional fees and costs relating to rendered legal services and other exceptional expenses within reasonable limits, or services relating to safekeeping or management of frozen Funds.

In the event that the submitted request is related to the basic expenses, the Executive Office must notify the UNSC or the Sanctions Committee of its intention to approve the submitted application. In case the Sanctions Committee does not object or issue a decision of rejection within five (5) business days, the Office may order that the approved amounts of funds are unfrozen and the individual holding the frozen funds shall be immediately notified in writing to such effect and asked to implement the decision and advise the Office of the actions taken in this regard.

Extraordinary Expenses:

To cover extraordinary expenses, other than those mentioned under the basic expenses section above.

The Executive Office will notify the relevant UN Sanctions Committee of the request to approve the submitted application and may only approve such request upon obtaining from the Sanctions Committee’s a written approval. In the absence of written approval, the Office will not grant the request.

  • The Executive Office will notify in writing the applicant or his/her legal representative of the decision to enable use of the frozen funds as per UN List.

The Executive Office may revoke the decision to use funds frozen under the UN List, at any time and when having reasonable grounds for a suspicion that the funds are used for financing terrorism or financing proliferation of weapons of mass destruction.

Grievances to the court: In case any of the applications for use of funds frozen under the UN List was rejected or remained without response thereto for thirty (30) days from the date of its submission, the applicant may file a grievance at the Competent Court within sixty (60) days from the date on which he was notified of the rejection of the application, or after a lapse of the response period.

The court’s decision on the grievance shall be incontestable, and if the court ruled to reject the grievance, a new grievance may only be filed after six (6) months from the date of rejection of the grievance, unless a serious reason acceptable to the chairman of the court arises before the expiry of such period. A challenge to the decision to reject the application shall not be accepted before a grievance against it was filed and rejected, or the period for responding to it had lapsed.

De-Listing from UN List

Any individual, entity, or group designated by the UNSC can submit a request for removal from the UN Consolidated List to the applicable UNSC Sanctions Committee, following the procedures for submitting de-listing requests pursuant to each UNSC Sanctions Committee.

Individuals, entities, or groups designated in UNSC Sanctions Lists can submit de-listing requests directly to the Focal Point for De-listing (except for designated individuals, entities, or groups inscribed on the list of the 1267/1989/2253 Committee (“the ISIL (Da'esh) and Al-Qaida Sanctions List”). Designated individuals or entities seeking to de-list from the Security Council’s ISIL (Da'esh) and Al-Qaida Sanctions List must submit their petition to The Office of the Ombudsperson.

De-listing procedures:

De-listing procedures related to ISIL (Da'esh) & Al-Qaida Sanctions:

The request for removal can also apply for:

  • A deceased individual; or
  • An entity that no longer exists.

For detailed procedures on Focal Point De-listing, please visit the UN’s webpage on Procedures of the Focal Point for De-listing and refer to the informal and unofficial flowchart that aims to provide a visual guide to the focal point process.

For detailed procedures on de-listing from “the ISIL (Da'esh) and Al-Qaida Sanctions List”, please visit the UN’s webpage on Procedure for requests for delisting submitted to the Office of the Ombudsperson and refer to the flowchart for an overview of the procedure.

De-listing from Local Terrorist List

Any individual or legal entity listed in Local List may submit, in person or through a legal representative, a grievance application to the Executive Office attaching thereto all documents supporting the grievance. Send the request to: iec@uaeiec.gov.ae

The following form can be filled to request and submit your delisting request

The Office shall refer the grievance to the Supreme Council, and both may request clarifications and further documentation from the applicant, or the Law Enforcement Authorities or other relevant agencies in the State.

If the Supreme Council determines that there are no longer reasonable grounds for continuing the listing, the Supreme Council shall propose to the Cabinet that the individual or legal entity in question is de-listed. In case of approval by the Cabinet, the name of the listed individual shall be removed from the Local List and the freezing and other measures taken by the aggrieved listing decision shall be automatically lifted. The Supreme Council shall send the de-listing decision immediately to the Office for publication.

The Office shall be notified by the Supreme Council in case the application was rejected and shall also be notified of the Cabinet’s decision on the grievance so that the Office may notify the applicant.

Grievances to the court: In case the grievance was rejected or remained un-responded to for sixty (60) days from the date of its submission, the grievant may challenge the Cabinet’s listing decision before the Competent Court within sixty (60) days from the date he was notified of the rejection or lapse of the response period.

The court’s decision regarding the grievance shall be incontestable. If a grievance was rejected, a new grievance may only be submitted after the lapse of six (6) months from the date of rejection of the previous grievance, unless a serious reason acceptable to the chairman arises before the expiry of such period. A challenge to a Listing or re-Listing decision shall not be accepted before a grievance against it was filed and rejected, or the period for response to it had lapsed, as stated in this article as stated above.

Frequently Asked Questions

What does ‘targeted financial sanctions’ ("TFS") mean?

The term targeted sanctions means that such sanctions are imposed against specific individuals, entities, or groups. The term TFS includes both asset freezing without delay and prohibition from making funds or other assets or services, directly or indirectly, available for the benefit of sanctioned individuals, entities, or group

Why are individuals, entities, or groups designated in the Sanction Lists?

The Sanction Lists include names of individuals, entities, or groups that the UAE or the UN believe are detrimental to national and/or global peace and security. These individuals, entities, or groups are mostly involved in acts of terrorism, terrorism financing, proliferation financing, and violation of international law.

What does 'freezing' mean?

Freezing means to prohibit the transfer, conversion, or movement of any funds or other assets that are owned or controlled by a designated individual, entity, or group in the Sanctions Lists.

What is the difference between ‘freezing’ and ‘suspending’?

Freezing and suspension measures follow the same procedures operationally (both are preventive measures that aim to stop the designated individual, entity, or group from gaining access to funds or other assets).

Suspending indicates that the reporting entity has come across a ‘potential match’ and is not sure whether the individual, entity, or group is certainly designated. The suspension measures should remain in place until further instructions are received from the Executive Office.

Freezing indicates that the reporting entity has come across a ‘confirmed match’ and the freeze measures must remain in place until the designated individual, entity, or group is de-listed from Sanctions Lists or upon further instructions received from the Executive Office.

What does ‘without delay’ mean?

‘Without delay’ means applying freezing measures immediately upon identifying a match to the Sanctions Lists or in any case within 24 hours upon designation of an individual, entity, or group on the Sanctions Lists.

What does 'funds or other assets' mean?

Any assets, including, but not limited to, financial assets, economic resources (including oil and other natural resources), property of every kind, whether tangible or intangible, movable or immovable, however acquired, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such funds or other assets, including, but not limited to, bank credits, travellers cheques, bank cheques, money orders, shares, securities, bonds, drafts, or letters of credit, and any interest, dividends or other income on or value accruing from or generated by such funds or other assets, and any other assets which potentially may be used to obtain funds, goods or services.

What is the legal framework for the implementation of TFS in the UAE?

Article 16(e) of Federal Law No. 20 of 2018 (amended by Federal Decree No. 26 of 2021) requires the prompt application of the directives when issued by the competent authorities in the state for implementing the decisions issued by the UN Security Council under Chapter (7) of UN Convention for the Prohibition and Suppression of the Financing of Terrorism and Proliferation of Weapons of Mass Destruction, and other related directives.

In addition, the UAE issued the Cabinet Decision No. 74 of 2020, establishing the framework regarding TFS, including the Local Terrorist List and the UN Consolidated List and the procedures to implement TFS.

Who must comply with TFS?

Sanctions restrictions, including TFS measures, must be implemented by any Person (both natural and legal entities), including government authorities and FIs, DNFBPs, and VASPs located in the UAE and operating within the UAE’s jurisdiction.

Cabinet Decision No. 74 of 2020 requires implementing TFS on which sanctions lists?

The scope of Cabinet Decision No. 74 of 2020 in implementing TFS covers the UAE Local Terrorist List and UN Consolidated List only. International sanctions lists are out of the scope of the Cabinet Decision.

How can I find out who is a designated individual, entity, or group?

You can find out who are the designated individuals, entities, or groups by checking the updated Sanctions Lists in the links below:

Is there an excel format of the UAE Local Terrorist List?

Yes. The excel format of the UAE Local Terrorist List can be found under the 'Sanctions Implementation' section of the Executive Office’s website https://www.uaeiec.gov.ae/en-us/un-page?p=2#

What actions must FIs, DNFBPs, or VASPs take if funds or other assets of designated individuals, entities, or groups are detected? 

In case an FI, DNFBP, or VASP determines that any of the funds or other assets it holds or administers belong to designated individuals, entities, or groups, it shall take the following steps to implement TFS:

  1. Freeze all funds or other assets without delay, and any funds or other assets derived or generated from such funds or other assets, without providing any notice to the customer or potential customer prior to taking the freezing measures.
  2. Refrain from providing any financial or other services or from providing funds or other assets to or for the benefit of a designated individual, entity, or group.
  3. Report to the Executive Office and the relevant Supervisory Authority within five days of the freezing measures taken through goAML, including information on the status of and any action taken with respect to assets, the nature of assets and amount of assets frozen, and any other information that is relevant to or would facilitate compliance with Cabinet Decision No. 74 of 2020.
  4. Fully cooperate with the Executive Office and the relevant Supervisory Authority in verifying the accuracy of the information provided.

What if my customer's name does not match the name of the designated individual or entity?

In case of a ‘potential match’ with a designated individual or legal entity, an FI, DNFBP, or VASP must first conduct an internal check on whether the potential match is a designated person. If the FI, DNFBP, or VASP is satisfied that the ‘potential match’ is not an individual or entity subject to TFS (‘false positive result’) after conducting the internal check, then it can allow for the business relationship to proceed while keeping an internal record of the case.

If the FI, DNFBP, or VASP is unable to verify whether the ‘potential match’ is a confirmed match or a false positive, then it must suspend any transaction and report it to the Executive Office by submitting a PNMR through goAML. The suspension measures must remain in place until further instructions are received from the Executive Office.

If I identify a confirmed or potential match, how should I report it?

If you identify a confirmed match, you must freeze without delay and report by submitting a Funds Freeze Report (FFR) through goAML. The FFR must include details on the type and amounts of funds or other assets frozen, ID documents of the confirmed match, and any other supporting documents.

If you identify a potential match, you must suspend without delay and report by submitting a Partial Name Match Report (PNMR) through goAML. The PNMR must include details on the type and amounts of funds or other assets suspended, ID documents of the potential match, and any other supporting documents.

Do I need to report confirmed or potential matches separately to my Supervisory Authority?

No. FFRs and PNMRs submitted through goAML are received simultaneously by the Executive Office and your relevant Supervisory Authority.

Should I report previous transactions or business dealings with confirmed or potential matches?

Yes. You must report any previous transactions of designated persons, even if you do not currently hold any funds or other assets or provide any services to the designated person.

The FFR or PNMR must clearly state that no funds or other assets are currently held, and no services are currently being provided to the designated person.

If the designated person has never conducted a transaction with or through you, or you have never held any funds or other assets of the designated person, or you have never provided any products or services assets to the designated person during the life of the business relationship, this should be made clear.

Am I under an obligation to register in goAML?

Any Person (natural or legal) that performs activities which fall under the definition of FIs, DNFBPs, or VASPs as per UAE legislation has an obligation to register on goAML to be able to submit suspicious transactions/activity reports (STRs/SARs) to the UAE FIU, as well as to submit TFS reports (FFRs/PNMRs) to the Executive Office and the relevant Supervisory Authority.

FIs and DNFBPs that are not registered on goAML face the risk of being subject to administrative and/or financial sanctions by the relevant Supervisory Authority for failure to register on goAML.

Please contact your relevant Supervisory Authority and the UAE FIU for instructions on how to register.

How should I report a confirmed or potential match if I am not a goAML user?

If you identify a confirmed or potential match, and you are not a goAML user (Persons that do not fall under the definition of FIs, DNFBPs, or VASPs and are therefore not under an obligation to register on goAML), then you must report it by sending an email to the Executive Office on iec@uaeiec.gov.ae with details of the case and attaching all supporting documentation.

Registered goAML users must always report a confirmed or potential match using goAML.

If I identify that a customer is subject to international sanctions, however, the customer is not listed on the UAE Local Terrorist List nor the UN Consolidated List. Should I report it by raising an FFR or PNMR?

No. FFRs and PNMRs are used only to report confirmed or potential matches to the UAE Local Terrorist List or the UN Consolidated List.

For designations on international sanctions lists (e.g., OFAC, UKHMT, EU, etc.), follow the instruction of your relevant Supervisory Authority on how to deal with matches to international sanctions lists.

What are the consequences in case of a failure to comply with the obligations set out in Cabinet Decision No. 74 of 2020, other applicable legislation and this guidance note?

Any Person, found to violate and/or be in non-compliance with the obligation in the Cabinet Decision No. 74 of 2020 or failing to implement procedures to ensure compliance may face imprisonment of no less than one year and no more than seven years and/or a fine of no less than AED 50,000 (fifty thousand dirham) and no more than AED 5,000,000 (five million dirham). 

In addition, Supervisory Authorities can impose appropriate administrative sanctions (e.g., ranging from warning letter to license cancellation) when there is a violation or shortcoming in implementing TFS obligations.

Can I be held liable for freezing funds of a designated individual or entity based on the Cabinet Decision?

The Cabinet Decision clearly states that any individual or entity is exempted from criminal, administrative, or civil liability if a freezing measure is carried out in good faith and for the purpose of complying with the provisions of the Cabinet Decision. Thus, as long as the freezing measures were taken based on the belief that the relevant funds are targeted funds, the individual or entity, FI, DNFBP, or VASP is exempted from any liability resulting from such freezing measure even if it later turns out that the frozen funds are in fact not targeted by the Cabinet Decision. 

At the same time, FIs, DNFBPs, and VASPs shall note that the criminal sanctions may apply to any Person who violates or fails to comply with the freezing obligation. Accordingly, both intentional and gravely negligent conduct resulting in the lack of application of a freezing measure may trigger administrative sanctions and/or criminal liability.

Can permission be obtained to access frozen assets by the designated individual or entity?

For the UN Consolidated List, the Executive Office, in limited circumstances, may permit access to frozen funds based on a request by the designated individual or entity. The applicant will, in such case, receive a written statement from the Executive Office stating the amount and conditions of access to the assets.

For the Local Terrorist List, the Ministry of Justice may permit access to frozen funds in some limited circumstances based on a request by the designated individual or entity or any affected third party. The applicant will, in such case, receive a written statement from the Ministry of Justice stating the amount and conditions of access to the assets.

May I permit transfers to be made into frozen accounts, and if so, which ones are subject to what conditions?

The Cabinet Decision provides that FIs, DNFBPs, or VASPs may credit frozen accounts with interest or other earnings on those accounts; or with payments due under contracts, agreements, or obligations that were concluded or arose before the date on which the individual or entity was designated, provided that any additions to such accounts shall also be frozen.

The Executive Office and the relevant Supervisory Authority must be notified about such transactions by submitting an FFR through goAML with information and supporting documentation on the additional amounts added to the account. 

How can I determine whether I am in possession of targeted funds?

FIs, DNFBPs, and VASPs are responsible for having in place effective processes, policies and procedures to implement the provisions of the Cabinet Decision No. 74 of 2020. This involves frequently checking customer databases and any information obtained on potential or existing customers against Sanctions Lists to determine whether an FI, DNFBP, or VASP possesses or administers funds for designated individuals or entities. The obligation by FIs, DNFBPs, and VASPs to freeze funds of designated individuals or entities applies immediately after a designation is published by the UAE Cabinet on the Local Terrorist List or by the UNSC in its Consolidated List.

Failure by an FI, DNFBP, or VASP to apply freezing measures, immediately or in any case within 24 hours after a designation has been made, or otherwise provide funds or services to or for the benefit of a designated individual or legal entity, constitutes a breach of UAE law and may result in the application of both financial sanctions and imprisonment as set out in the Cabinet Decision.

Some FIs, DNFBPs, and VASPs rely on externally provided screening services (e.g., World Check) and other providers to verify that their clients are not subject to any sanctions. It is important to note in this regard that such online services are useful but should not be viewed as an absolute guarantee of compliance with the obligations under the Cabinet Decision. Additional periodic checks against the designations made in the Sanctions Lists must be carried out.

When and how often do I have to conduct screening?

FIs, DNFBPs, and VASPs must undertake regular and ongoing screening on the latest Local Terrorist List and UN Consolidated List. Screening must be undertaken in the following circumstances:

  1. Upon any updates to the Local Terrorist List or UN Consolidated List. In such cases, screening must be conducted immediately and without delay to ensure compliance with implementing freezing measures without delay (within 24 hours).
  2. Prior to onboarding new customers.
  3. Upon KYC reviews or changes to a customer’s information.
  4. Before processing any transaction.

FIs, DNFBPs, and VASPs are also required to identify, assess, monitor, manage and mitigate terrorist and proliferation financing risks, particularly sanctions-related risks. The internal screening process must take into account such a risk assessment. Where there are higher risks, FIs, DNFBPs, and VASPs should take commensurate measures to manage and mitigate the risks, including applying enhanced screening measures. Correspondingly, where the risks are lower, they should ensure that the screening measures are commensurate with the lower level of risk. FIs, DNFBPs, and VASPs must ensure full implementation of targeted financial sanctions in any risk scenario.

How long do I have to keep funds frozen?

The Cabinet Decision does not limit the timeframe for any given freezing measure. Accordingly, the obligation to keep funds frozen could apply indefinitely in some cases.

FIs, DNFBPs, and VASPs are required to lift the freezing measures if the name of a designated individual or entity is removed from the Sanctions Lists.

What shall I do if my name is similar to a designated person?

In case freezing measures were taken in relation to funds of a person that has the same (or similar) name as a designated individual or entity but who is in fact not the same person, such person can send a request to lift the freezing measures to the Executive Office.

Such a request should include a grievance letter addressed to the Executive Office of Committee for Goods & Materials Subjected to Import & Export Control and other supporting documents (such as ID documents) and should be sent to the Executive Office by email through iec@uaeiec.gov.ae

Is my Supervisory Authority going to check compliance with the Cabinet Decision in the course of their onsite inspections?

The Cabinet Decision No. 74 of 2020 provides that FIs, DNFBPs, and VASPs are under an obligation to have in place adequate processes, policies and procedures, including resourcing thereof, to verify that they are complying with all aspects of the relevant Cabinet Decisions. Supervisory Authorities will verify compliance by FIs, DNFBPs, and VASPs with this obligation during their supervisory activities. A failure to have in place such procedures may result in the application of criminal as well as supervisory sanctions as stipulated in the Cabinet Decision.

Are Politically Exposed Persons (PEPs) part of the scope of implementing targeted financial sanctions (TFS)?

No. Obligations to implement TFS are exclusively on the individuals, entities, and groups that are designated on the Sanctions Lists (regardless of whether they are considered as PEPs).

Should we conduct screening for Politically Exposed Persons (PEPs)?

PEPs are out of the scope of Cabinet Decision No. 74 of 2020 and you are advised to follow your Supervisory Authority guidance and other best practices on the customer due diligence required when dealing with PEPs, including on screening.

Is notifying the customer after implementing freezing measures considered as “tipping off”?

No. FIs, DNFBPs, and VASPs may notify their customers after the freezing measures have been implemented. As long as the customer is notified after the freezing measures have been taken, it is not considered as tipping off. However, FIs, DNFBPs, and VASPs must not inform their customers prior to taking the freezing measures.

What should I do if one of my customers is affected by a freezing measure?

You should notify the customer of the Grievances and Requests process as reflected on the Executive Office’s website.

Executive Office Publications

Supervisory Authorities Publications

FATF Guidance Publications

Training Material

Contact

Send an email to contact the Executive Office of the Committee for Goods and Materials Subject to Import and Export Control to iec@uaeiec.gov.ae.

Committee for Commodities Subject to
Import & Export Control

 

BurDubai- Umm Hurair1- Khalid Bin Al walid st – Consulates Area in the Ministry of Foreign Affairs and International Cooperation/ Dubai Office

 

from 8:00 am to 3:00 pm

 

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