Money laundering cases are sensitive and complex legal matters that require a thorough examination of the facts and available evidence. In this article, we will review the case of our clients, a company and a partner (owner) holding a 50% stake in the company, who, along with the other partner, were accused of committing the crime of possessing funds under circumstances that raise suspicion about the legality of their source.

Case Facts: The conviction order stated that during the period from November 2021 to May 2022, our clients received a total of AED 30 million in the personal business account of the company. The public prosecution indicated that there was evidence of the illegitimacy of these funds, based on a technical report issued by the Anti-Money Laundering Department. Thus, our clients were accused of committing the crime of possessing illegal funds according to the Anti-Money Laundering and Terrorism Financing Law.

Hence, our clients were charged with the offense of possessing funds under circumstances that raise suspicion about their legality, punishable under Articles (1, 4, 23/1, 4, 25 bis, 26, 29/2) of the Anti-Money Laundering and Terrorism Financing Law, in accordance with its latest amendments under Federal Decree-Law No. 26 of 2021.

After reviewing Articles (121, 127, 129, 140/2) of Federal Decree-Law No. (38) of 2022 concerning the issuance of the Criminal Procedure Law and its amendments under Federal Decree-Law No. (45) of 2023, the criminal case and the defendants were referred to the Court for the imposition of the strictest penalties based on the relevant legal articles that formed the basis of the case.

Details of the Accusation: The core of the accusation was accredited to the defendants through an official letter sent from a foreign investigative agency specializing in money laundering to the relevant authorities in Dubai, concerning an inquiry ” based solely on estimation rather than solid evidence ” that funds had been transferred from a foreign company owned by the defendant to a company in Dubai also owned by the defendant. The agency claimed that the source of these funds was suspected to be illegal. After the UAE authorities cooperated, including the central bank and the operating banks where the defendant’s company held accounts, a technical report was prepared by the General Directorate of Anti-Money Laundering, which was directed to the foreign investigative agency. Following examination and analysis by the agency, it concluded that there was no crime or even a complaint that could be registered against the defendant, and it could not consider that the suspicion and inquiry sent to the state could rise to any criminal act against the defendant.

Despite the fact that the foreign authorities confirmed the legality of the defendant’s funds, aided by the confirmation from the UAE authorities, a money laundering case was filed against our clients. However, after reviewing the report from the Anti-Money Laundering Department, the public prosecution closed the case due to the lack of elements constituting a money laundering crime against the defendant and referred the defendants to the Court based on the same technical report that relied on assumptions and hypothetical inferences.

Defense: Our team, led by Mohamed Alserkal presented defenses before the court, asserting the absence of the elements of the crime, pointing out that the accusation was based on an official letter from a foreign investigative agency specializing in money laundering, which was only an inquiry based on suspicion. Our team emphasized that the foreign authorities confirmed the legality of our clients’ funds, indicating that no crime existed.

Furthermore, our team provided evidence showing that our clients had engaged into more than 25 agreements with companies outside the country, with the company’s commission determined based on the type of contract.

Our team submitted to the court an expert consultancy report concluding that the accused company is equally owned by the first and second defendants and that it generated revenues from its activities in project management and marketing, administrative, and strategic services through several agreements with foreign companies in exchange for financial amounts, estimating the revenue generated from these agreements at AED 53,979,000. All these revenues were extracted from the company’s accounts at two banks within the country, and the company received most of its revenues in foreign currency (dollars) in its accounts at these banks. The accounts in local currency did not include significant revenues, and most transactions in local accounts were transfers from foreign currency accounts to local currency accounts to cover the company’s or their personal expenses. All the company’s revenues resulted from contracts with foreign companies, all outside the country, and were legally and accounting compliant with those contracts, reflecting these revenues in the accounts of the first and second defendants as company owners. The total ending balances of the company paralleled with the net cash flows.

 Legal Ground: Our team based our defenses on specific legal texts, where Article 25 bis from the Federal Decree-Law No. (20) of 2018 On Anti-Money Laundering, Combating the Financing of Terrorism and Financing of Illegal Organizations states:

“A penalty of imprisonment for a period not less than three (3) months and/or a fine not less than fifty thousand (50,000) AED shall be imposed on anyone who possesses, conceals or conducts any money transaction when there is sufficient evidence or presumption of the illegality of its source”.

Upon conviction, the court shall rule for confiscation in accordance with the provisions of Article (26) of this Law by Decree.

Our team also referenced the ruling issued in Cassation No. 592 of 2013, Case No. 7, Court of Cassation (Abu Dhabi).

Judgments: In the ruling issued by the Court of First Instance on 30/09/2024, the court acquitted our clients, stating that there was no evidence to prove that the companies associated with the accused company were involved in any suspicious activities. The court also determined that the evidence presented by the public prosecution was insufficient to support the charges.

Following the acquittal, the Public Prosecution appealed the judgment, relying on the technical report and other evidence. However, in its decision dated 09 January 2025, the Court of Appeal upheld the acquittal, affirming that the Court of first instance had properly evaluated the evidence and issued a well-reasoned decision.

This case highlights the importance of evidence in money laundering cases and the necessity of achieving justice. While the accusation is serious, strong evidence must be available to prove the crime. In this instance, the court recognized our clients’ innocence based on the insufficiency of the evidence presented by the public prosecution, reflecting the judiciary’s commitment to achieving justice.