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United Arab Emirates Modernizes Bribery and Corruption Legislation

His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the United Arab Emirates (UAE), has decreed various updates to Federal Law No. 3 of 1987, known as the UAE Penal Code, that bring the country’s bribery and corruption legislation positively into line with other regimes in other jurisdictions.

Still No Freestanding Legislation

The provisions of UAE law prohibiting bribery and corruption continue to be found in the UAE Penal Code, predominantly at Articles 234-239.  However, the recent Presidential decree has dramatically developed the prohibitions in the UAE Penal Code, broadening the scope and application of the law, sharpening the regulator’s teeth, and introducing certain new features.

Wider Scope and Application

The revised law criminalizes the bribery or attempted bribery of both public and private sector employees, while the old law had only criminalized public sector corruption.

Moreover, the definition of public officials under the old law had only included those persons deemed to be UAE public officials, and therefore foreign public officials could not be prosecuted even if their criminality had adverse impact on the UAE.  The revised law now applies outside the UAE’s territory, to any person who commits any of the bribery offences set out in the UAE Penal Code, if the criminal or victim is a UAE national or citizen, if the crime is committed by an employee of the UAE public or private sector, or if the cases involves UAE public property.  In particular, the law now extends to foreign public officials and employees of international non-governmental organizations.

Increased Sanctions

The revised law worsens the consequences to the individual for the offence of bribery, raising the minimum fine from AED 1,000 to AED 5,000 (~USD 275 to ~USD 1,360).  This should increase the deterrent effect of the law. 

The legislator has also increased the punitive sanctions for corporate entities.  The fine has been raised from AED 50,000 to AED 500,000 (~USD 13,600 to ~USD 136,000) in the event that a company is convicted for offenses committed by its representatives, management, or agents, and which was done for the company’s benefit or on its behalf.  This dramatic increase should force companies to take more rigorous action to prevent employees committing crimes.

Interestingly, the legislator has removed any limitation period for criminal or civil actions in relation to bribery.

New Features

The court may now confiscate the money or other “thing” of value used or intended to be used in the crime, without prejudice to the rights of bona fide third parties.

more, pardons may be issued to offenders who inform authorities before a crime is detected.  Even if offenders inform the authorities after a crime is detected, they can still be exempted from penalties if the reporting leads to the arrest of the other criminals.

Additional Considerations

The UAE was already considered by some to be the “least corrupt nation in [the] Arab world.”  That appears borne out by Transparency International’s 2018 Corruption Perceptions Index, in which the UAE led the way in the Middle East and North African region with a score of 70 and a rank of 23rd place.

Undeniably, the revisions to the law bring the UAE into line with international best standards and, of course, the United Nations Convention against Corruption, to which the UAE has been a signatory since August 2005.  The revisions also represent a clear and present effort by the UAE to eradicate corruption at all levels, not just at government level.

It is very possible that the revisions to the law foreshadow increased enforcement activity on the part of UAE regulators.  Time will certainly tell.  Organizations in the Middle East vary enormously in their approaches to combating bribery and corruption.  As a result, those with robust policies that effectively regulate bribery and corruption are ahead of the game, particularly as the revised law is already in effect.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Richard Gibbon Criminal Defense Lawyer Squire Patton Boggs Dubai
Attorney

Rich Gibbon is a member of our Government Investigations & White Collar Practice and focuses on white collar criminal defense, regulatory enforcement and internal investigations. He has been based in the Middle East for eight years and has garnered extensive experience counselling boards of directors and senior management across the Middle East and Africa, Levant, Europe, and South Asia through multi-agency, multi-jurisdictional financial crime investigations and enforcement actions. This includes multinational corporates in connection with anticorruption regimes and...

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