VP issues law on Dubai financial markets

Dubai / WAM

In his capacity as Ruler of Dubai, Vice President and Prime Minister of the UAE, His Highness Sheikh Mohammed bin Rashid Al Maktoum issued Law No (4) of 2016 on the Dubai Economic Security Centre.
The Centre aims to maintain Dubai’s position as a global financial and economic hub, ensure its financial stability and protect its investments from crimes that may harm its economy.
The new Law seeks to ensure the proper implementation of international best practices in Dubai’s financial markets, protect investors from risks, combat illegal and harmful activities, and predict and manage risks and negative economic trends that can jeopardise the stability of the market and the national economy.
The new Law will enhance investors’ trust in Dubai’s financial markets and encourage them to use Dubai as a hub for their businesses, contribute to ensuring the integrity of procedures related to financial operations, and encourage market players to actively combat activities that can affect economic security and increase awareness about threats that such activities might pose.
Entities subject to the Centre’s authority include local government bodies that are guaranteed minimum profit by the government as well as those that are subsidised by the government and any company or institution licensed to engage in economic activity in the emirate, including licensed companies operating in special development zones, free zones including the Dubai International Financial Centre. The Centre will also have oversight over charities operating in the emirate as well as any institution that is required to be monitored by the Centre as per a decision of the Chairman of Dubai Executive Council.
The new Law also defines the roles and responsibilities of the Dubai Economic Security Centre, which include: combating corruption, fraud, crimes, bribery, embezzlement, destruction of public property, forgery, counterfeiting, money laundering , terrorism financing, illegal organisations or other crimes that may be committed by entities that are under the jurisdiction of the Centre.
The Law authorises the Centre to monitor and analyse economic phenomena in the emirate and reduce any potential negative impact; monitor abuses, financial irregularities, financial markets, institutions, commercial sectors and free zones in Dubai; supervise trading of currencies, commodities, precious metals and listed and unlisted trading securities; supervise donations sent or received by charities; develop rules and procedures to prevent interactions with individuals or organisations involved in terrorism, or with any individual who maintains contacts with these organisations.
As per the Law, the Dubai Economic Security Centre is tasked with proposing and reviewing legislations related to the supervision of financial and economic activity in the emirate, preparing specialised studies on the financial and economic affairs of the emirate in order to enhance economic and investment awareness, in addition to providing recommendations in this regard; providing support and advice on the economic security of entities under its jurisdiction upon request; providing training programmes; and preparing reports on important issues affecting the economic security of Dubai for submission to the Chairman of the Dubai Executive Council.
Furthermore, the Centre is tasked with the development and publication of reports and periodic statistics on the financial and economic status of the emirate, participation in councils and committees focused on Dubai’s financial and economic affairs, following up on criminal proceedings that may impact the emirate’s economy, and combating activities and practices that may have a detrimental impact on the emirate’s economy and its resources.
The new Law stipulates that the executive arm of the Centre will have an Executive Director and will be staffed by a number of administrative, financial and technical employees. The Law also outlines the roles of the Executive Director, who will be appointed by the Chairman of the Dubai Executive Council.
The new Law enables the Centre to coordinate with concerned authorities to carry out its responsibilities and tasks such as supervision, research, investigation, information gathering, taking preventive measures, data and information exchange, financial and administrative auditing, as well as recording crimes and offences in accordance with the provision of this Law.
The Centre will also provide protection and ensure the safety of individuals collaborating with it for the purpose of maintaining the economic security of the emirate by not disclosing information about the identity and whereabouts of the collaborator.
For the purposes of this Law, providing information on matters affecting the economic security of the emirate shall not be considered a violation. Any person providing the information shall not be subject to any legal or disciplinary action unless proven to be providing false information.
The new Law outlines the penalties for violations of its provisions. Disclosure of information or data that is considered confidential as per the Law could bring imprisonment of up to a maximum of one year and a minimum of three months, apart from a fine of up to AED 50,000 and a minimum of AED 10,000. Any person who violates the provisions of this law will incur a minimum fine of AED 10,000 and a maximum fine of AED 500,000.
The Law requires concerned individuals and entities to fully cooperate with the Centre in order to enable it to fulfill its mandate without hindrances.
The new Law annuls any other legislation that contradicts or challenges its provisions. The new Law shall be published in the Official Gazette and is valid from the date of its publication.