Recent years have witnessed a concerted effort to align the legal regime with global standards, reflecting the UAE’s dedication to fostering a legitimate business environment. Particularly in Dubai, the visionary goals set by HH Sheikh Mohammed bin Rashid Al Maktoum envision the emirate among the world’s top economic powerhouses by 2033. To achieve such lofty ambitions, a strong criminal law regime is imperative to deter unscrupulous activities that might tarnish the nation’s image. This article delves into the legal landscape, addressing key questions surrounding corporate criminal liability, reporting obligations, and the nuances of the legal process.
1: The Framework of Corporate Criminal Liability
In the UAE, the legal framework for corporate criminal liability is firmly established. According to Federal Decree Law No. 32/2021, companies can be held liable for damages resulting from unlawful acts committed by their chairpersons and board members during the management of the company. This extends to personal liability for acts of fraud and abuse of power.
Expanding on this, Federal Decree Law No. 31/2021 on the Issuance of the Crimes and Penalties Law goes beyond the Companies Law, stating that juristic persons can be criminally liable for offenses committed by their representatives, directors, or agents acting on their behalf. While the law doesn’t explicitly mention employees, it’s likely that the term “representative” or “agent” encompasses employees acting on behalf of the company. Corporate criminal liability is also recognized in the Anti-Money Laundering Law, holding legal persons accountable for crimes committed intentionally in their name.
Notably, the UAE doesn’t make a hierarchical distinction in liability based on the seniority of the individual within the company. The focus is on whether the criminal act was committed in the company’s name or on its behalf. However, if an employee commits a criminal offense for personal gain unrelated to the company’s interests, the company may not incur criminal liability.
2: Reporting Obligations and Vigilance
Companies operating in the UAE must not only understand their liability but also be vigilant in reporting crimes and suspicious transactions. The Penal Code imposes a general duty on individuals with knowledge of a crime to report it to the authorities, with failure to do so constituting a punishable offense. When it comes to potential money laundering, the Anti-Money Laundering Law imposes specific duties on financial institutions and designated non-financial businesses and professions (DNFBPs) to report promptly to the Financial Intelligence Unit.
Article 251 of the Companies Law adds an extra layer, obligating auditors of public joint-stock companies to notify the Securities and Commodities Authority within 10 days of detecting any crime. Importantly, this duty may extend to auditors of limited liability companies (LLCs) based on the Companies Law, emphasizing the broad reach of reporting obligations.
3: The Legal Landscape – Authorities and Process
Prosecuting cases related to corporate criminal liability in the UAE involves three key authorities: the Police Department, the Public Prosecution, and the Criminal Courts. The Police Department plays a pivotal role in initial investigations and arrests, while the Public Prosecution’s Office initiates criminal cases on behalf of society members. The Criminal Courts, including first instance, appeal, and supreme courts, handle cases initiated by federal or local prosecution.
Individuals facing potential criminal proceedings in the UAE should stay informed about their status, as criminal cases could result in travel bans. Emirate-specific online services allow residents to check for pending cases. Companies, as responsible entities, should prioritize compliance with jurisdictional rules to avoid legal repercussions.The Police Department acts as the first line of defense, safeguarding the public, gathering initial statements, arresting suspects, and conducting investigations. Collaborating closely with the Public Prosecution’s Office, it works to execute orders and contribute valuable insights to the investigation process.
The Public Prosecution’s Office plays a pivotal role in initiating criminal cases on behalf of society members. Its jurisdiction extends to criminal cases, ensuring justice and compliance with the rule of law. This office takes charge from the investigation phase to the indictment, navigating the legal intricacies until a final judgment is reached. As outlined in Article 7 of the Criminal Procedures Law, the Public Prosecution enjoys exclusive jurisdiction to initiate and prosecute criminal proceedings.
The Criminal Courts, including first instance, appeal, and supreme courts, function as the ultimate arbiters in cases initiated by federal or local prosecution. Offering a tiered structure, they ensure a thorough and impartial examination of evidence and legal arguments. For example, in Abu Dhabi, the Court of Cassation serves as the supreme court, providing the final word on legal matters.
In the UAE, staying informed about potential criminal proceedings is essential. Individuals facing such situations may experience travel bans, emphasizing the importance of promptly addressing legal matters. Fortunately, each emirate provides online services, accessible through websites or mobile applications, enabling residents to verify whether they are involved in any pending cases. Alternatively, contacting the police of the emirate of residence, such as the Dubai Police at 901, can provide additional clarity.
Conclusion:
As companies aspire to contribute to the nation’s economic prowess, aligning with the legal framework is crucial. By comprehending the legal intricacies, reporting obligations, and the role of key authorities, businesses can navigate the legal landscape adeptly, ensuring a secure and compliant operating environment in this flourishing economic hub.For personalized guidance on navigating the legal intricacies of corporate criminal liability in the UAE, it is advisable to consult experienced Dubai lawyers.