UAE’s Targeted Financial Sanctions and Grievance Procedures

The Riffle

The Executive Office for Control and Non-Proliferation (EOCN) is the UAE’s primary authority for implementing Targeted Financial Sanctions (TFS). These measures are designed to combat terrorism financing (TF), proliferation financing (PF), and sanctions evasion — ensuring that the UAE’s financial system remains protected from illicit activity .

TFS obligations apply to both individuals and entities, including Financial Institutions (FIs), DNFBPs, and Virtual Asset Service Providers (VASPs), making compliance a core responsibility across sectors .

The Legal Framework

The UAE’s TFS framework is built on:

• Federal Law No. 20 of 2018 (AML/CFT law, amended 2021)

• Cabinet Decision No. 10 of 2019 (Implementing Regulation, amended 2022)

• Cabinet Decision No. 74 of 2020 (Local Terrorist List + UN obligations)

Sanctions apply only to entities and individuals on:

• UAE Local Terrorist List (Cabinet-issued under UNSCR 1373)

• UNSC Consolidated List

TFS Obligations for Reporting Entities

Reporting entities must follow a four-step compliance process:

1. Register on EOCN’s Notification Alert System (NAS): Ensures timely updates on designations and de-listings.

2. Screen Against Sanctions Lists: Daily and event-driven screening of customers, UBOs, counterparties, and transactions.

3. Implement Freezing Measures: Freeze funds/assets of designated persons within 24 hours and prohibit providing services.

4. Report via goAML: File Confirmed or Partial Name Match Reports within 5 business days, and maintain records for 5 years .

Additional obligations include internal policies, staff training, “no tipping off” rules, and cooperation with the EOCN.

Ownership and Control Rules

TFS obligations extend beyond listed names:

• Majority Ownership (50%+): Assets of entities owned by designated persons must be frozen.

• Control Without Majority: Freezing applies if there is documented control (e.g., voting rights, board dominance, consolidated accounts).

• Acting on Behalf: Entities or persons proven to act under the direction of designated persons must also be frozen .

Grievance Procedures

The UAE provides avenues for affected parties to challenge or seek relief from sanctions measures:

• De-listing Requests: Removal from Local List (via EOCN OGS system) or UN List (via UNSC mechanisms).

• Lifting Freezing Measures: For mistaken identity or wrongful impact on third parties.

• Permission to Use Frozen Funds: For basic expenses, legal fees, or extraordinary costs (subject to EOCN approval).

Applicants may file appeals in UAE courts if grievances are rejected, with strict timelines for resubmission .

Enforcement & Penalties

Non-compliance with TFS rules can result in:

• Imprisonment (1–7 years)

• Fines (AED 50,000 – AED 5,000,000)

• Administrative Sanctions (warnings, license suspension/cancellation)

However, those acting in good faith by freezing funds or refusing services are protected from civil or criminal liability.

Conclusion

The UAE’s TFS framework emphasises proactive compliance, timely screening, and effective reporting. For financial institutions, DNFBPs, and VASPs, adhering to these obligations is not only a regulatory requirement but also critical for safeguarding the integrity of the financial system.

With the EOCN’s clear grievance procedures and strong enforcement measures, the UAE continues to strengthen its position as a global financial hub committed to transparency and security.

Read the full briefing document presented by 10 leaves here -