Legislation Details
- Full Title: Federal Decree-Law Regarding "Know Your Client" Digital Platform
- Law Type: Federal Decree-Law
- Law Number: [30] of 2024
- Issued Date: 01 Oct 2024
- Effective Date: 14 Oct 2024
- Official Gazette: No. 785
- Sector: Finance and Banking
- Status: Active
- Number of Articles: 42
- Chapters/Parts: 0
- Amendments: 0
Summary
This Federal Decree-Law establishes a "Know Your Client" (KYC) Digital Platform in the United Arab Emirates. The law aims to develop the financial infrastructure, enhance digital transformation, verify client identities, provide necessary data to users, regulate the collection and use of KYC data, and facilitate information exchange to combat financial crimes. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 2) The law mandates the incorporation of a company to develop and manage the KYC Platform. This company will be responsible for establishing and operating the Platform, regulating KYC data processes, issuing KYC reports, and coordinating with data providers. The Central Bank is empowered to monitor the company's activities, set controls, issue codes of conduct, and provide instructions. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Arts. 4-6, 12)
What is the scope and purpose of this law?
The provisions of this Federal Decree-Law apply to the company established to manage the KYC Platform, the data providers, clients, and users. It also applies to any party involved with KYC data as specified in the Executive Regulations. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 3) The law aims to: (1) develop the financial infrastructure and enhance digital transformation; (2) verify client identity and assess compliance with financial and other applicable regulations; (3) provide necessary data to users to enhance transparency in financial transactions; (4) regulate the collection, analysis, and use of KYC data; and (5) facilitate information exchange to combat financial crimes. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 2)
What are the key definitions under this law?
The law provides the following key definitions:
- State: United Arab Emirates
- The Cabinet: The Council of Ministers of the UAE
- Ministry: Ministry of Finance
- Minister: Minister of Finance
- The Central Bank: The Central Bank of the United Arab Emirates
- Governor: Governor of the Central Bank
- Concerned Authorities: Authorities specified in the Executive Regulations
- Platform: "Know Your Client" (KYC) Digital Platform
- Company: The company established to create and manage the KYC Platform
- Provider: Any authority that provides necessary data to the Platform
- Client: Any natural or legal individual who consents to obtaining a KYC report
- User: The authority entitled to obtain a KYC report
- Data of "Know your Client": Data, information, documents, and official papers related to the client
- Report of "Know your Client": A report issued by the company based on client approval and user request
- Client Approval: Prior approval from the client to obtain a KYC report
- Codes of Conduct: Binding controls applied to data providers and users
(Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 1)
What are the main obligations and requirements?
The key obligations imposed by this law include: 1. The company must not disclose or reveal any KYC data in its possession to others, except as stipulated in the law and its Executive Regulations. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 6(1)) 2. The company must implement modern systems for processing KYC data and reports in accordance with the controls and specifications defined by the Executive Regulations. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 6(2)) 3. The company must protect KYC data transmitted through the Platform from loss, damage, unauthorized or unsafe access, usage, or modification, including developing tools and measures to handle emergency situations. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 6(3)) 4. The company must comply with the use of KYC data in accordance with the provisions of the law, its Executive Regulations, and the resolutions issued by the Central Bank. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 6(4)) 5. The company must notify the Central Bank of any violations of the provisions and Executive Regulations. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 6(5))
What licensing, registration, or approval requirements exist?
The law does not specify any licensing, registration, or approval requirements for individuals or companies. It mandates the incorporation of a company to develop and manage the KYC Platform, but the details of this process are not provided in the law. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 4)
What rights and protections does this law provide?
The law provides the following rights and protections: 1. The client has the right to access the details of their KYC report in accordance with the controls outlined by the Executive Regulations or as approved by the Central Bank. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 7(1)) 2. The company is not liable for any errors in the KYC data provided by the data provider, unless such errors result from the company's negligence or that of its employees. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 7(2)) 3. The law prohibits the company from using, trading, or exchanging KYC data for purposes other than those stipulated in the law and its Executive Regulations. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 9) 4. KYC data is confidential and can only be accessed or disclosed with the client's approval, the approval of the heirs, legal representative, or authorized agent, or based on a request from the competent judicial authorities. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 11)
Which authorities or bodies are responsible for enforcement?
The key authorities and bodies responsible for enforcement under this law are: 1. The Central Bank: The Central Bank is the competent regulatory authority over the company's activities. It has the following powers: a. Monitoring and supervising the proper performance of the company's assigned tasks b. Setting controls under which the company may conduct its activities and provide services c. Formulating and issuing codes of conduct applicable to the data provider and user d. Specifying the data and information related to the client that the company may request from data providers e. Issuing any instructions or resolutions to the company in line with the provisions of the law and its Executive Regulations (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 12) 2. The Cabinet: The Cabinet is responsible for issuing the Executive Regulations of this law based on the proposal of the Minister of Finance and in coordination with the Governor of the Central Bank. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 16)
What are the penalties for non-compliance?
The law imposes the following penalties for non-compliance: 1. A penalty of imprisonment for a period of not less than 2 years and a fine of not less than AED 50,000, or one of these two penalties, shall be imposed on: a. Disclosing KYC data or report in circumstances not authorized under the law and its Executive Regulations b. Obtaining a KYC report or gaining access without the required approval or through fraudulent means or false information c. Violating the confidentiality required for KYC data or report d. Willfully misrepresenting data or providing false information to the company 2. It shall be an aggravating circumstance if a public employee or any employee of the company commits any of the offences. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 14) 3. The imposition of the penalties stipulated in the law shall not prejudice any severer penalty stipulated in any other law, nor shall it affect the civil liability of the violator. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 14(3))
What fees, charges, or financial provisions are specified?
The law does not specify any fees, charges, or financial provisions related to the KYC Digital Platform or its operations. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024)
What exemptions or exceptions apply?
The law does not provide any explicit exemptions or exceptions. It applies to the company, data providers, clients, and users, as well as any party involved with KYC data as specified in the Executive Regulations. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 3)
How are disputes resolved under this law?
The law does not specify any dispute resolution mechanisms. It only states that the Executive Regulations shall include the mechanism for submitting, examining, and handling complaints related to data. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 16(7))
What are the key deadlines and time limits?
The law does not provide any specific deadlines or time limits. It only states that the user may, upon an order from the judge of urgent matters, request the company to issue a KYC report regarding any person indebted to the user, in accordance with the controls specified by the Executive Regulations. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Art. 10(2))
How does this law interact with other UAE legislation?
This Federal Decree-Law references the following related UAE legislation: - Federal Law No. (1) of 1972 Concerning the Competences of Ministries and the Powers of Ministers, as amended - Federal Law No. (8) of 2004 Concerning the Financial Free Zones - Federal Law No. (6) of 2010 Concerning Credit Information, as amended - Federal Decree-Law No. (14) of 2018 Concerning the Central Bank and the Regulation of Financial Institutions and Activities, as amended - Federal Decree-Law No. (20) of 2018 Concerning Combating Money Laundering and the Financing of Terrorism and Illegal Associations, as amended - Federal Decree-Law No. (32) of 2021 Concerning Commercial Companies - Federal Decree-Law No. (45) of 2021 Concerning the Personal Data Protection (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Preamble)
When did this law come into effect?
This Federal Decree-Law Regarding "Know Your Client" Digital Platform was issued on 01 Oct 2024 and became effective on 14 Oct 2024, as published in the Official Gazette No. 785. (Federal Decree-Law Regarding "Know Your Client" Digital Platform, 2024, Issued Date and Effective Date)
Source Documents
This article analyses Federal Decree-Law Regarding "Know Your Client" Digital Platform for legal research and educational purposes. For the purpose of interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text prevails. This does not constitute legal advice.