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UAE Anti-corruption & Bribery 2019

Anti-corruption Q&A

1. Legal and enforcement framework

1.1 Which legislative and regulatory provisions govern anti-corruption in your jurisdiction, from a regulatory (preventive) and enforcement (criminal) perspective?

1.1.1 The United Arab Emirates (UAE) has been fighting bribery and corruption since the 1980s with the enactment of Federal law 3/1987 otherwise known as the UAE Federal Penal Code (the Code) and specifically Articles 234-239 of the Code. Federal Decree-Law 11/08 (also known as the Federal Human Resources Law also combats bribery.

In Dubai, the above laws are supplemented by the Code of 1970 and Dubai Law 37/2009 on the Procedures for the Recovery of Illegally Obtained Public and Private Funds (Financial Fraud Law).

1.1.2 There are also other laws which have the secondary effect of combatting bribery and corruption and they are:

i. Federal Law 4/2002 regarding the Criminalization of Money Laundering; ii. The Regulations governing the declarations by travellers entering or leaving the UAE carrying cash or negotiable instruments; iii. Federal Law 7/2014, Combating Terrorism Crimes; iv. Federal Law 9/2014 amending certain provisions of Federal Law 4/2002 concerning the Combating of Money Laundering Crimes; v. Cabinet Resolution 38/2014, Executive Resolution of Federal Law 4/2002; vi. Dubai Law 4/2016 on Financial Crimes.

1.2 Which bilateral and multilateral instruments on anti-corruption affect your jurisdiction?

1.2.1 The UAE has ratified the United Nations Convention against Corruption (UNCAC) according to Federal Decree-Law No. 8 of 2006 (2006 Law). The UAE also signed the Arab Convention to Fight Corruption (the Arab Convention) on the 21 December 2010, which includes 21 Arab Countries, including the UAE.

1.2.2 Both UNCAC and the Arab Council (which is responsible for the creation of the Arab Convention) were created specifically to combat corruption on a global and territorial scale respectively. Ratifying of the UNCAC means that along with all 178 countries, as of October 2017, the UAE can combat corruption on a global scale. With so many countries ratifying the agreement, there is a unified front against corruption, and everyone will be tackling it in the same or similar ways. Being a member of the Arab Council is also important as there are unique problems regarding corruption facing the Arab states that may not be applicable in the rest of the world, so the Arab states must join forces in combatting corruption on a smaller scale than UNCAC allows.

1.3 Are there accessible directives or other guidance from enforcement authorities in your jurisdiction?

1.3.1 Yes, there are.

i. The Government has published the Laws and Regulations on Bribery and Corruption and has created obligations for companies in Federal Law No. 2 of 2015 on Commercial Companies (the Company Law) which sets out obligations for companies to follow. These include appointing a completely independent auditor who is listed in the Register for Auditors and Accountants as per Federal Law No. 12 of 2014, the Organization of Auditing Profession (OAP) law, which regulates the professions of auditing and accountancy and stipulates that the auditor must have more than five years’ experience in auditing private and public companies. ii. Article 153 of the Company Law prevents the following:

a) Article 153(1) states that a joint-stock company may not issue any loans or guarantees to any member of the board. It further states that the board members’ family members up to the second degree, will also be considered “Board members” in terms of the law.

b) Article 153(2) states that no loan may be granted to a company where a Board member, [and his family as described in 153(1)], owns more than a 20% share of that company

c) Article 153(3) states that any agreement in contravention of the provisions of Article 153, shall not be valid and the Auditor is to include the extent of compliance by the company in their annual report to the General Assembly of the company. iii. Article 222 of the Company Law prevents the company or its subsidiaries from giving financial aid to a shareholder to enable the shareholder to hold shares, bonds or Sukuk issued by the company. It further defines financial Aid as any of the following: a) Providing loans; b) Providing gifts or donations; c) Providing assets of the company as security; d) Providing security or guarantees for the obligations of another person.

iv. Article 242 of the Company Law prevents the company from making any donations within the first two years. Therefore, after this period, donations may be made once they meet the following requirements: a) It cannot exceed 2% of the company’s average net profits of the previous two years; b) It must be for the benefit of society; c) The beneficiary of the donation must be disclosed in the company’s audit report; d) A special resolution is required to donate.

1.4 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?

1.4.1 Numerous Authorities have jurisdiction to combat bribery and corruption:

1.4.2 The Anti-Corruption Unit (known as the Abu Dhabi Accountability Authority) was established in 2015 by Abu Dhabi Law no 14 of 2008 which applies to public sector bodies;

1.4.3 The State Audit Institution (SAI) which is also for public sector bodies;

1.4.4 The Central Bank of the UAE has the Anti-Money Laundering and Suspicious Cases Unit;

1.4.5 The Police Forces of the UAE (jurisdiction restricted to each Emirates jurisdiction);

1.4.6 The Abu Dhabi Accountability Authority;

1.4.7 Finally, the only free zone to have their own specific Authority, (apart from the Abu Dhabi Global Market, which is still relatively new, and we are not dealing with it here) is the Dubai International Financial Centre (DIFC) which has the Dubai Financial Services Authority;

1.4.8 Dubai has created the Dubai Economic Security Centre (DESC) which will focus on bribery and corruption.

i. The DESC will have an extensive yet non-exhaustive list of competencies including but not limited to: a) Proposing and auditing legislation to regulate financial and economic affairs in Dubai. b) Preparing and publishing periodical reports and statistics on the financial and economic position of Dubai. c) Following up on cases that the Centre is concerned with, including transnational crimes in coordination with the judicial authority. d) Holding and participating in conferences and seminars, cooperating with relevant regional and international organizations to exchange experience, knowledge and information about economic security. e) Combating corruption, fraud, bribery, embezzlement, destruction of public property, forgery, counterfeiting, money laundering, terrorism or illegal organizations financing, and other crimes that may be committed in entities that are under the jurisdiction of the Centre. f) Monitoring abuses and financial irregularities committed in Dubai. g) Supervising the trading of currencies, commodities, precious metals and securities, both listed and unlisted. h) Developing rules and procedures to prevent interactions with individuals or organizations involved in terrorism or with any individual having any connection to such organizations. ii. The DESC has the power to: a) Request the Public Prosecutor to seize funds, documents or any other thing related to the DESC’s investigations. b) Be able to liaise with international institutions to gain information according to an investigation. c) Suspend trade in the stock market, freeze, suspend or reactivate any regulations that relate to the financial market. d) Obtain details of any bank account of any natural or legal person with any relevant body.

1.5 What are the statistics regarding past and ongoing anti-corruption procedures in your jurisdiction?

1.5.1 The Corruptions Percentage Index (CPI) ranks countries and territories based on how corrupt their public sector is perceived to be, with the score being out of 100, the higher the score, the less corrupt the country is perceived to be.

1.5.2 The CPI ranked the UAE in 2018 with a score of 70/100, which is good, compared to 2003’s score of 52/100.

1.5.3 The average CPI ranking from 2003 is 64.56, with the average since 2009 being 68/100.

1.5.4 Here is a table highlighting the CPI rating for the past ten years.

1.5.5 One can see the vast improvements the UAE has made to tackle bribery and corruption and how it is working given the CPI score.

1.6 What are the shortcomings identified in your jurisdiction’s anti-corruption legislation (including recommendations of the Organisation for Economic Co-operation and Development, where applicable)?

1.6.1 First and foremost, we believe there should be protection for whistle-blowers and amnesty for confessions even if it is by the person who accepted the bribe. The idea is to wipe-out bribery and corruption and as mentioned, it relies on the good faith of people. The issue is, why would someone be willing to risk a lawsuit or defamation charges to report it? Secondly, even if someone accepted a bribe and has had a change of heart due to guilt, by them reporting it, they are still exposing the crime. They need to be punished in some form, but perhaps jail time should be excluded.

1.6.2 As for investigating it and prosecuting it, we believe that we must continue to support agencies that focus on bribery and corruption and ensure that proper training is given to them and all government officials on what constitutes bribery and corruption.

2. Definitions and Scope of application

2.1 How is ‘public corruption’ or ‘bribery of a public official’ defined in the anti-corruption legislation?

2.1.1 Article 236 bis (1) of the code deals with the offence of accepting a bribe as a public official as follows: “Any person who administers an entity or establishment that pertains to the public sector, or is employed by either one of whatever capacity, who requests, accepts, either directly or indirectly, a gift, benefit or a grant that is not due, or is promised of the same, and, whether to the benefit of himself or another person, in order for such person to commit or omit any act that is included in his duties, even if he has intended not to fulfil or omit such act, or if the request, offer or promise is made after the fulfilment or omission of such act, shall be sentenced to imprisonment for no more than five years.”

2.2 How is a ‘public official’ defined in the anti-corruption legislation? How is a ‘foreign public official’ defined?

2.2.1 Article 5 of the Code defines a Public Official as follows: i. “A public servant shall be defined in the present Law as any person in a federal or local position, whether legislative, executive, administrative or judicial, whether be appointed or elected such as: ii. Persons entrusted with public authority and employees of ministries and government departments; iii. Members of the military forces; iv. Employees of security bodies; v. Members of the judiciary, chairmen and members of legislative, advisory and municipal boards; vi. Any person assigned to a certain task by a public authority, to the extent of the delegated task; vii. Chairmen and members of boards of directors, directors and other employees of public authorities and institutions, as well as companies owned, wholly or partially by the Federal Government or local governments; viii. Chairmen and members of the boards of directors, directors and other employees of societies and associations of public welfare.”

2.2.2 Public servants shall be deemed by the present law as any person who is not included within the categories outlined in preceding clauses. Any person engaged in the work of public service as assigned to him by a public servant in charge under laws or regulations concerning the assigned task.

2.3 How is ‘private corruption’ or ‘bribery in the private sector’ defined in the anti-corruption legislation?

2.3.1 In the private sector, Article 236 bis (2) deals with the offences of accepting a bribe in the private sector and states the following: “Any person who promises another person managing an entity or establishment of the private sector, or who is employed by him in any capacity, with a gift, benefit or grant that is not due, or who offers or grants the same, either directly or indirectly, whether to the benefit of the person himself or for another person, in order for that person to perform or to omit an act that is included in his duties or constitutes a violation thereof, shall be sentenced to imprisonment for no more than five years.”

2.4 How is ‘bribe’ defined in the anti-corruption legislation?

2.4.1 There is no “set in stone” definition for bribery in a specific law in the UAE, however when one looks at the United Nations Convention Against Corruption (UNCAC) which was adopted as per the 2006 Law, specifically Chapter 3, the definition of bribery is defined as being a criminal offence when the following is committed intentionally:

"(a) The promise, offering or giving, to a public official either directly or indirectly, of an undue advantage, for the official himself or another person or entity. So that the official act or refrain from acting in the exercise of his or her official duties;

(b) The solicitation or acceptance by a public official, directly or indirectly, of an undue advantage, for the official himself or herself or another person or entity, so that the official act or refrain from acting in the exercise of his or her official duties."

The Code supports the above definition.

2.5 What other criminal offences are identified and defined in the anti-corruption legislation?

2.5.1 The anti-corruption legislation has its roots in the Code which incorporates most criminal offences.

2.5.2 Specific financial related offences that are incorporated within the purpose bribery legislation includes fraud, embezzlement, money laundering, funding terrorism, companies guaranteeing a loan to a chairman or person in power, disclosure of classified information, perjury, decisions in court which are willingly made against truth, court officials who purposively give false information or are prejudice against a certain party (such as a translator changing the answers of a witness) and any misleading information given to authorities for personal reasons. The list is not exhaustive and merely highlights a few examples of offences identified under in the anti-corruption legislation.

2.6 Can both individuals and companies be prosecuted under the anti-corruption legislation?

2.6.1 Both individuals and corporate entities can be held liable for bribery. However, the penalties may differ. Individuals that are found guilty of bribery will face possible jail time whereas corporate entities will typically be issued with a fine.

2.6.2 Both individuals and companies can also face administrative penalties such as sector exclusion and trade license cancellation.

2.7 Can foreign companies be prosecuted under the anti-corruption legislation?

2.7.1 Yes, a foreign company may be prosecuted for corruption if the following conditions are met. i. the perpetrator or victim is a UAE national; ii. the crime was committed by a public or private employee in the United Arab Emirates, or iii. the crime involved UAE public property.

2.8 Does the anti-corruption legislation have extraterritorial reach?

2.8.1 Yes, the anti-corruption legislation is explicitly extraterritorial provided the conditions in question 2.7 are met.

3. Corruption and bribery

3.1 How are gifts, hospitality and expenses treated in your jurisdiction?

3.1.1 There are specific provisions governing expenses of this type for public officials.

3.1.2 Article 234 and Article 237 of the Code punishes the acceptor of a bribe, the offeror of the bribe or intermediary as well as regulates the acceptance of any benefits.

3.1.3 Article 234 of the Code states as follows:

“Any public servant or person entrusted with a public service, a foreign public servant or an employee of an international organisation who requests or accepts, whether directly or indirectly, a gift, benefit or other grant that is not due, or is promised the same; whether to the benefit of the employee himself or for another entity or establishment, in order for such employee to commit or omit an act included in his duties even if he has intended not to commit or omit such act, or if the request, acceptance or promise is made after the fulfilment or omission of such act, shall be sentenced to temporary imprisonment.”

3.1.4 Article 237 states as follows:

“Any person who promises, offers or gives a public servant or a person entrusted with a public service, a foreign public servant or an employee of an international organisation, a gift, benefit or grant that is not due, either directly or indirectly, whether to the benefit of the employee himself or for another person or entity, for such employee to commit or omit an act included in his duties, shall be sentenced to imprisonment for no more than five years”

3.1.5 Article 237 bis states as follows:

“Any person who promises, offers, grants or gives, either directly or indirectly, a public servant or any other person, a gift, benefit or grant that is not due, to abet that public officer or person to abuse his power, whether actual or presumed, to obtain, from a public department of authority, an unlawful benefit for the benefit of the original abettor of such act or the benefit of any other person.

Any public servant or any other person who requests or accepts a benefit, gift or grant that is not due, whether for himself or for another person, either directly or indirectly, so as such public servant or person abuse his power, whether actual or presumed, to obtain, from a public department or authority, that unlawful benefit.”

3.1.6 Finally, Article 237 bis 2 states as follows: “An intermediary between the briber and a bribe-taker to offer, request, accept, take a briber or any promise thereof shall be sentenced to imprisonment for no more than five years.”

3.1.7 As you can note from the above Code, it is prohibited for public officials, whether foreign or local, to accept any form of hospitality, travel and entertainment expenses of any other kind.

3.1.8 Any gifts that are symbolic or promotional material must have the "gifters” logo on the material.

3.2 How are facilitation payments treated in your jurisdiction?

3.2.1 They are regulated. Article 234 and Article 237 of the Code will again come into play here. The Code was updated in 2016 to allow for the inclusion of foreign public officials specifically to combat such issues. The penalties as under Article 234 and Article 237 will apply in this case as well.

3.3 How is bribery through intermediaries and other third parties treated in your jurisdiction? Can those third parties be held liable?

3.3.1 Yes, they can be, as per Article 234 and Article 237 of the Code, intermediaries will face the same penalties as the bribe and briber.

3.4 Can a company be held liable for bribery committed by management or other employees?

3.4.1 Yes it can be.

3.4.2 Article 65(1) of the Code (as amended) states that Juristic Persons (other than Government services, Government departments, public organisations and institutions) shall be held liable for the crimes of their representatives, dir3ectorws and agents that were carried out in the juristic person’s name.

3.4.3 The company can be sued (if a third party suffered damages as a result of the bribery) and furthermore as for the criminal consequences of bribery, fines and penalties can also be imposed on the company up to a maximum of AED50,000. The person who committed the crime though will be held fully liable to the extent of the laws of the UAE.

3.5 Can a company be held liable for bribery committed by domestic or foreign subsidiaries?

3.5.1 This is highly unlikely unless in the event of collusion.

3.5.2 The principle that a person cannot be held liable for the actions of another is fundamentally ingrained within the UAE law.

3.5.3 Article 2 of the Code states that no one shall be answerable for the crimes committed by another and that the person is innocent until proven guilty. Juristic persons are regarded as separate persons.

3.5.4 Article 65 (as amended) of the Code further extends the principle expressed in Article 2 by specifically stating that a juristic person can be held liable for the actions of its agents.

3.5.5 The court of Cassation, in Penal Case No. 4542/2015, upheld the above principles and found the parent entity was not liable for the actions of its subsidiary.

3.6 Post-merger or acquisition, can a successor company be held liable for bribery committed by legacy companies?

3.6.1 In terms of Article 291 of Federal Law No. 2/2015 on Commercial Companies (the Companies Law) a Merger means that the merged company or companies shall cease to be a corporate person(s) and that the merging company or the new company shall substitute such company or companies in all their rights and obligations. The merging company shall be a legal successor of the merged company or companies.

3.6.2 In terms of Article 281 of the Companies Law, in the event a company is converted to another company then:

i. Upon conversion, every partner or shareholder shall have several shares or stocks in the new company equal to the value of his shares or stocks in the company before conversion. If the value of the shares or stocks of a partner or shareholder is less than the applicable minimum limit of the nominal value of the new shares or stocks, the difference shall be completed in cash, failing which such partner or shareholder shall be deemed to have withdrawn from the company. The value of his shares or stocks shall be paid according to their market or book value on the date of conversion, whichever is higher. ii. Upon its conversion and re-registration under its new legal form, the company shall maintain its corporate personality and its rights and obligations before such conversion. Such conversion shall not discharge the acting partners from the obligations of the company before the conversion unless the creditors agree thereto in writing.

3.6.3 As one can see from the above, the successor company can be held liable for bribery committed by legacy companies.

4. Compliance

4.1 Is implementing an anti-corruption compliance programme a regulatory requirement in your jurisdiction?

4.1.1 There is no set compliance program requirement set out in the UAE corruption laws, however, the UAE is very serious about corruption and bribery and the obligation to prevent it is placed on public offices, private companies and individuals alike. The penalties for committing bribery and corruption are serious and in the case of private companies, if the board consented to the bribery, the entire board can be found guilty which encourages companies to prevent bribery and corruption. As such all companies have developed their internal mechanisms in line with the law to deal with corruption. They have instituted platforms that will restrict the chances of bribery and corruption occurring and will punish the occurrence of either very strictly.

4.2 What compliance best practices should a company implement to mitigate the risk of anti-corruption violations?

4.2.1 Each company should adopt strict and clear policies in avoiding corruption, that is specifically garnered to that company’s business. Each company should apply and is enforced right from the very top to the very bottom.

4.2.2 Encourage reporting of offences in cases where such offences were witnessed by offering protection for “whistle-blowers” and by investigating each claim and rewarding such a report. Likewise, for completely fabricated reports, punishment should be administered as this will discourage frivolous and “personal vendetta” related reporting.

4.2.3 Utilize external monitoring such as external auditors to audit both incoming and outgoing accounts of the company and to ensure a clear and clean financial path can be attributed to the company’s money. In cases of a discrepancy, then forensic accountants should be appointed to investigate.

4.2.4 Operate transparently by making accounting records fully and freely accessible as this will immediately discourage acceptance of bribes and corruption as it could easily be identified if the records are freely available.

4.3 Which books and records requirements have relevance in the anti-corruption context?

4.3.1 In terms of Article 26 of Federal Law 2/2015 and Articles 2 and 3 of the Executive Regulations for the Tax Procedures Law 7/2017, accounting records must accurately show the company's financial standing and must further be kept for five years after the company's financial year-end.

4.3.2 Article 26 – Article 38 of Federal Law 18/1993 (the Commercial transactions Law), state that a company must keep financial records such that are required by the nature of the business of the company to accurately show the company’s financial standing. Furthermore, a daybook and general ledger must also be utilized.

4.3.3 Financial institutions must also keep records of documents as prescribed by relevant supervisory authorities from time to time for five years including relevant judgements, inspection reports and the outcome conducted by relevant authorities and any details about the closure of a client account.

4.3.4 In the DIFC companies, limited partnerships and registered partnerships are governed respectively by the DIFC Companies Law, General Partnership Law and the Limited Partnership Law.

4.3.5 Article 101 of the DIFC Companies Law states that a company must keep accounting records for a period of 6 years from the date they occur and Article 18 of the General Partnership Law and Article 26 of the Limited Partnership Law, state that records must, with reasonable accuracy, disclose the financial position of the business.

4.4 Are companies obliged to report financial irregularities or actual or potential anti-corruption violations?

4.4.1 Yes, they are, as is anyone.

4.4.2 Article 274 of the code places an obligation on a person to report a crime and furthermore, it is illegal to knowingly fail to report money laundering or financing criminal organisations or terrorism.

4.5 Does the failure to implement an adequate anti-corruption programme constitute a regulatory and/or criminal violation in your jurisdiction?

4.5.1 No, there is no formal requirement in the bribery and anti-corruption legislation for companies to have implemented an anti-corruption program, however as discussed in question 4.1, companies implement their compliance programs as the penalties for bribery and corruption are strictly enforced and are severe.

5. Enforcement

5.1 Can companies that voluntarily report anti-corruption violations or cooperate with investigations benefit from leniency in your jurisdiction?

5.1.1 In terms of Article 239 of the Code, should the briber or intermediary report the offence before it is discovered, they shall be exempt from the penalty. It makes no mention of the accepter of the bribe being exempt from the penalty if they report the bribe.

5.1.2 Should the offender (in any context as defined) plead guilty then it would likely be considered a mitigating circumstance.

5.1.3 The court in these types of cases have a wide discretion to consider the circumstances of each matter and any mitigating factors that may apply. They can then apply these mitigating factors to decide the type of punishment that should be handed down.

5.2 Can the existence of an anti-corruption compliance programme constitute a defence to charges of anti-corruption violations?

5.2.1 As per 5.1, it will likely be a mitigating circumstance in a matter.

5.3 What other defences are available to companies charged with anti-corruption violations?

5.3.1 When you consider Article 234 and Article 237, you can see that there is no defence to bribery.

5.3.2 Article 234 goes further and specifically states the following, “Any person who commits or omits an act included in his duties even if he has intended not to commit or omit such act.” Even if the accepter of the bribe has no intention of committing or omitting the act in question, it is irrelevant. With such a strenuous onus placed on the population, whether public or private, there are no defences to the act of bribery and corruption.

5.3.3 Again, there may be mitigating circumstances, but there is no absolute defence.

5.4 Can companies negotiate a pre-trial settlement through plea bargaining, settlement agreements or similar?

5.4.1 Currently there is no legislation providing for this, however, should a company co-operate fully it may be a mitigating circumstance at the time of sentencing.

5.5 What penalties can be imposed for violations of the anti-corruption legislation? Can non-exhaustive penalties be imposed for such violations (e.g., exclusion from public procurement, exclusion from entitlement to public benefits or aid, disqualification from the practice of certain commercial activities, judicial winding-up)?

5.5.1 the penalties differ between the company and individual, but both can be severe.

5.5.2 For bribery, individuals can face up to 15 years in prison or fine equal to the briber or AED5,000 (whichever is higher). Crimes under other corruptions laws will also command a fine and/or jail sentence.

5.5.3 There are further administrative penalties that can be imposed by supervisory authorities about money laundering and funding of terrorism, such as i. Fines. ii. Sector Exclusion. iii. Trade License cancellation. iv. Suspension of business operations. v. Restrictions on owners or board members vi. Warnings.

5.5.4 For companies the penalties are fines as well as possible administrative penalties as described in 5.5.3.

5.6 What is the statute of limitations to prosecute anti-corruption violations in your jurisdiction?

5.6.1 There is no statute of limitations for a claim against bribery.

5.6.2 Article 239 bis 2 of the code states as follows: "A criminal lawsuit shall not be terminated by lapse of time limitation in any of the crimes outlined in this Chapter, and the punishment imposed shall not be extinguished. Moreover, civil actions either arising or related thereto shall not be terminated by the lapse of time limitation.”

6. Alternatives to prosecution

6.1 What alternatives to criminal prosecution are available to enforcement agencies that find corruption?

6.1.1 There is currently no Legislation permitting alternative measures to criminal prosecution. As per Section 5 above, there can be mitigating circumstances, but the penalties already listed are the only methods of dealing with Bribery and Corruption.

6.2 What procedures are involved in concluding an investigation in such a way?

6.2.1 N/A

6.3 What factors will determine whether such an alternative to prosecution is to be offered by an enforcement agency to those who have been involved in corruption?

6.3.1 N/A

6.4 How common are these alternatives to prosecution?

6.4.1 N/A

6.5 What reasons, if any, could lead to an increase in the use of such alternatives?

6.5.1 As mentioned there are no alternatives so nothing can be increased. The implantation of such alternatives may work as an incentive to increase self-admissions of acts of Bribery and Corruption, but as these alternatives do not exist nor are their known plans to introduce them, it would merely be speculation at this point to assume what the reasons could lead to their implantation.

7. Trends and predictions

7.1 How would you describe the current anti-corruption enforcement landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

7.1.1 As stated above in 4.1.1, the UAE is very serious about enforcing anti-corruption with enforcement being applied to public and private sectors and individuals alike. The very real and serious threat of imprisonment and fines are a substantial motivator for individuals and companies alike to refrain from bribery and corruption.

7.1.2 There are no known publicly developments anticipated in terms of anti-corruption legislation in the next 12 months however the Code was recently amended to further cover bribery and corruption and new developments are commonly announced in efforts to combat bribery and corruption.

8. Tips and traps

8.1 What are your top tips for the smooth implementation of a robust anti-corruption compliance programme and what potential sticking points would you highlight?

8.1.1 The compliance program must be built-in ethical foundations. i. Shareholders, as well as employees, will appreciate an ethical compliance program as it demonstrates the company is ethical at hear and has not merely established a compliance program for the sake of compliance. ii. An ethical compliance program that explains the ethics behind the compliance points are more easily identifiable and therefore more easily applied by different individuals

8.1.2 Ensure the compliance program is easy to understand. i. Apart from simply being ethical, the compliance program must be easy to understand. This means all the documents containing the compliance program must be set out with an “easy to read” format and simple language.

8.1.3 Consistently develop the compliance program i. A compliance program cannot be a static program without room to develop. ii. The compliance program must develop over time as the business develops and laws and regulations develop. iii. Ensuring the program is revised relatively often and keeps up to date with current laws and regulations will always ensure stricter compliance by the company.

8.1.4 Cover important areas i. With small companies, a compliance program is by nature far simpler than it could be for large companies. ii. Once a company becomes large it becomes harder to ensure the compliance program is covering all aspects of the business and this can result in an extremely detailed and lengthy compliance program requirements that become more difficult to follow. iii. By ensuring the compliance program is streamlined and covering important areas such as regulatory risks, document retention, trailing and other tools that can assist, there is more of a chance of the compliance program being understood and thus followed by all employees.

8.1.5 Training i. As described in 7.1.4, a compliance program must include details of training and available tools to be used to ensure compliance. ii. It is no good to simply cover the program in general and rather specific training for relevant areas of the program as well as how the employees can implement it must be given to the employees regularly.

8.1.6 Ensure the compliance program is implemented for all employees i. A compliance program must include all levels of employees from the top to the bottom. ii. Should management not be included in the compliance program enforcement or training, there stands a substantial chance that they will fail to understand it fully and furthermore their blasé attitude will filter down to all employees that they manage. iii. By having the CEO of the company involved in the compliance program and training it will set a good example to the remainder of the employees on how they are to operate, and that the compliance program is important.
Published first by Mondaq.
Read full publication here.
Article authored by Tyne Hugo, Associate.
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