<p><strong>INTRODUCTION</strong></p>
<p>The tremendous amounts of illicit profits generated encourage the  criminals involved to discover innovative methods of controlling their  ill-gotten funds without jeopardizing their underlying activity or  identity. They do this by disguising the sources of the funds, changing  their form, or moving them to a place where they are less likely to  attract attention.</p>
<p>The United Nations Office on Drugs and Crime (UNODC) reported that  criminal proceeds amounted to an estimate of 3.6% of the global GDP in  2009, with around 2.7% (or USD 1.6 trillion) laundered throughout that  year . Although it is impossible to calculate with certainty the amount  of money that is globally laundered every year due to the illegal nature  of the whole process, other studies have estimated that the overall  value of criminal proceeds being laundered each year amounts to USD 3  trillion.</p>
<p>International agreements and UAE national laws strongly associate  money laundering with fraud. The connection between both crimes will be  explored through out this article.</p>
<p><strong>THE DISTINCT NATURE OF MONEY LAUNDERING</strong></p>
<p>Practically, INTERPOL considers any act or attempted act to conceal  or disguise the identity of illegally obtained proceeds in order to  appear to have originated from legitimate sources to be a crime of Money  Laundering .</p>
<p>Therefore, money laundering is a derivative crime that mandates a  predicate offense as the source of the illicit proceeds subject to  laundering. A predicate offense is a crime that has been concluded  before the commencement of money laundering. Both crimes shall have  distinct legal elements but not any predicate crime qualifies as a  prerequisite for money laundering. Legislation limits predicate crimes  subject of money laundering to certain offenses. Examples of such  predicate offenses are bribery, embezzlement, breach of trust and fraud.  In other words, money laundering as a crime only occurs after the  perpetration of certain prior crimes such as those previously mentioned.</p>
<p>However, the aforementioned should not be interpreted to entail that  criminals accused of money laundering must be the same as those who  committed the predicate offense. It is legally acceptable to be solely  accused of committing money laundering, if the criminal being accused of  such crime did not take part in seizing the illicit proceeds being  laundering.</p>
<p><strong>THE EMIRATI APPROACH IN COMBATING MONEY LAUNDERING</strong></p>
<p>Money laundering in the United Arab Emirates is primarily  criminalized by Federal Law No. 4 of 2002 and supported by the Federal  Penal Law No. 3 of 1987 and Federal Penal Procedures Law No. 35 of 1992.  The aforementioned Federal Law No. 4 of 2002 regarding criminalization  of money laundering sets out the rules governing such crime in line with  the international treaties ratified by the UAE, in order to penalize  dealing in the proceeds of certain crimes, including but not limited to,  drug trafficking, illegal arms dealings, bribery, embezzlement, breach  of trust and fraud.</p>
<p>The aforementioned law mandates that any suspicious transaction must  be reported to the Anti-Money Laundering and Suspicious Cases Unit  (AMLSCU) of the Central Bank of the UAE. The said unit investigates such  reports, gathers intelligence and decides whether further prosecution  should follow. After evaluating the gravity of reported suspicious  transactions, the said unit decides whether to freeze the suspected  properties and refer the matter to public prosecution, or disregard  further investigation. It is worthy to note that the UAE Attorney  General has exclusive authority to initiate criminal actions in relation  to money laundering accusations.</p>
<p><strong>A PRACTICAL APPROACH</strong></p>
<p>In a recent cassation case, the public prosecution charged eleven  accused parties (two of which are companies) with money laundering, on  the basis that they intentionally transferred into the UAE, GBP  4,209,625 and USD 380,461.95, illegally obtained from a fraud in order  to conceal and disguise the illicit origins of such proceeds.</p>
<p>The prosecution claimed that the accused parties conspired to  deceitfully forge documents on behalf of an airline company after  hacking its private bank account. They also forged signatures of the  representatives of the said airline company and sent instructions, by  misrepresenting such company, to its bank to transfer the aforementioned  monies to their private bank accounts.</p>
<p>The First Instance Criminal Court sentenced each of the accused  natural persons to one year imprisonment, fined each an amount of AED  30,000 and ordered the confiscation of the proceeds. The same court  fined each of the two accused companies an amount of AED 300,000.  However, the judgment was appealed by the convicts. The Appeals Court  upheld the challenged judgment but amended it to relieve the convicts  from the ordered confiscation of their illicit proceeds.</p>
<p>The matter was brought forward to the Cassation Court on grounds that  the lower courts erred in their reasoning, misconstrued presented  evidence and misapplied the law. It was argued that the lower courts  mistakenly characterized the attributed crime as money laundering on  grounds that money laundering is a derivative crime that requires a  prior separate crime as the source of the illicit proceeds being  laundering. In addition, the said prior committed crime has to be one of  those crimes exclusively set out by Article 2 of Federal Law No. 4 of  2002 regarding criminalization of money laundering.</p>
<p>The Cassation Court concluded that lower courts have full discretion  to evaluate the facts of the case and the evidence submitted by the  parties. It restated that the appeal judgment had duly illustrated the  facts of the case to establish all the legal elements of the charged  crimes and properly correlated the undertaken criminal actions with  logical prosecution evidence pursuant to the documents and testimonies.</p>
<p>When interpreting Article 2 of the Federal Law No. 4 of 2002, the  Cassation Court stated that the material aspect of money laundering as a  crime is composed of any criminal behavior undertaken by the  perpetrator with the effect of concealing or disguising the origins of  the proceeds of one of the crimes exclusively set out by the  abovementioned article including, among others, fraud and breach of  trust.&nbsp; The court maintained that a predicate crime has to be concluded  from which the illicit proceeds are obtained and that the criminality  relates to the possession of such proceeds, regardless of the purpose of  such possession as long as the perpetrator had prior knowledge at the  time of receiving such proceeds of it&rsquo;s &ldquo;dirty nature&rdquo; and with no  consideration to whether the perpetrator is a natural or judicial  person.</p>
<p>The Cassation Court demonstrated that money laundering is an  intentional crime entailing a criminal intent. Such criminal intent is  prior knowledge that the proceeds possessed by the perpetrator stem from  a crime punishable by law.</p>
<p>In addition, the convicts argued before the Cassation Court that  their actions ought to be interpreted as forgery and not fraud as  misconstrued by the lower courts and, therefore, their undertaken  actions do not fall within the scope of Article 2 of the Federal Law No.  4 of 2002. Accordingly, the whole case has to be dismissed against  them. The court established that the law intended to penalize dealing in  the proceeds of certain crimes as fraud. Moreover, fraud implies  actions undertaken by the perpetrator to seize for himself or for  others, the possession of any movable property by using fraudulent  practice, assuming a false name or quality whenever it is intended to  deceive the victim and bring him to surrender a legal right.</p>
<p>Accordingly, the Cassation Court reached a conclusion that the  Appeals Court properly applied the law when it concluded from the  presented evidence that all the legal elements of fraud were present and  that despite the forgery of documents, such forgery was a step towards a  bigger fraudulent scheme to deceive the victim into surrendering the  proceeds that were afterwards attempted to be laundered.</p>
<p>In line with the above, the Cassation Court restated that the Appeals  Court properly applied the law on the facts and sustained its view to  relieve the convicts from confiscation of the crime proceeds but instead  such proceeds should be restituted to the victim of the crime. The  reasoning behind this is that, despite the fact that Federal Law No. 4  of 2002 explicitly states that criminal proceeds shall be confiscated,  the proper application of the general rules of law according to Article  82 of the Federal Penal Law No. 3 of 1987 limit confiscation to cases  where there is no prejudice to the rights of any bona fide third party  (i.e. other parties having good faith or the victim of the crime).</p>
<p>In summary, the Cassation Court rejected all the arguments and claims  of the convicts, reaching an ultimate decision that the challenged  judgments are in conformity with the law and consequently upheld the  judgment of the Appeals Court.</p>
<p><strong>CONCLUSION</strong></p>
<p>Concealing or disguising the proceeds of fraud is considered as money  laundering. Fraud entails any false representation of a matter of fact  that deceives and is intended to deceive a victim so that the latter  will act upon it to his legal injury and detriment. The foregoing  illustrates the gravity of both crimes and that the deceptive nature of  both crimes needed harsh punishments by laws in order to deter  criminals.</p>
<p>Unfortunately, money launderers exploit the complex existing global  financial systems and the differences between the respective national  anti-money laundering laws and systems. Also, they exploit jurisdictions  with weak or ineffective controls in order to move their funds more  easily without detection. In that sense, money laundering has several  negative impacts such as undermining the integrity and stability of  financial institutions and systems, discouraging foreign investments,  distorting international capital flows and ultimately destroying  societies by allowing criminals to attempt committing the same crimes  again and again.</p>
<p>In addition, the previous problems are further aggravated by the fact  that the UAE is one of leading business hubs world wide with its well  known free market. Therefore, the UAE courts interpret money laundering  broadly to combat all perpetrations as long as the prior committed crime  constitutes one of those prohibit by the money laundering law.</p>
<p>Finally, the UAE is making concerted efforts to tackle this problem  by implementing stern measures and modern safeguards along with signing  and implementing mutual judicial cooperation agreements and extradition  treaties.</p>