UAE Law and Practice Contributed by: Stuart Paterson, Janine Mallis, Tania Forichon and Elif Eren Ozenir, Herbert Smith Freehills Kramer LLP
Facilitation payments (being a small bribe made to public officials with the intention of expediting a gov - ernment administration process) would constitute bribes under the Penal Code and are therefore pro - hibited. There are also emirate-level offences in relation to bribery. 3.3 Anti-Bribery Regulation There is no general obligation to prevent bribery in the UAE, nor is there an obligation to maintain a compli - ance programme. However, under Article 282 of the Penal Code, any person who acts as an intermedi - ary between the briber or the bribe-taker can also be imprisoned for a maximum period of five years. In the DIFC, rule 5.3.20 of the DFSA General Mod - ule Rule Book requires DFSA “Authorised Persons” to establish and maintain reasonable systems and controls that ensure the entity and its employees do not engage in conduct that may constitute a financial crime, nor facilitate others to engage in such conduct. There is a similar requirement under rule 3.3.20 of the ADGM General Rulebook. Article 323 of the Penal Code imposes a positive gen - eral obligation to report crimes, including bribery. In addition, Article 15 of the AML Law requires financial institutions, DNFBPs and virtual asset service provid - ers to file Suspicious Activity Reports (STRs) with the UAE Intelligence Unit if they suspect that funds are linked to a crime. Failure to report may result in fines, sanctions and/or imprisonment. Free zone regulators, such as the DIFC’s DFSA and the ADGM’s Financial Services Regulatory Authority (the “FSRA”), impose similar obligations. 3.4 Insider Dealing, Market Abuse and Criminal Banking Law Insider dealing is criminalised in the UAE under Federal Law No 4 of 2000 Concerning the Emirates Securities and Commodities Authority and Market (the “Securities Law”). Article 37 of the Securities Law prohibits the exploi - tation of undeclared information that may affect the prices of securities to gain a personal benefit. Article
39 also prohibits individuals from dealing in securities using undeclared or non-disclosed information which they may know by virtue of their office. Market Manipulation Article 36 of the Securities Law prohibits the submis - sion of any untrue details, statements or information that affect the market value of securities or investment decisions. The penalties for violating these provisions include imprisonment for a maximum period of three years and/or a maximum fine of AED1 million. In addition, a person found guilty of insider trading in the UAE, or the equivalent in any other jurisdiction, may not act as a director in the UAE at any time. Any dealing car - ried out by any person contrary to these prohibitions under the Securities Law will be deemed null and void (Article 37). DIFC and ADGM Law DIFC Law No 1 of 2012 (the “Markets Law”) (as amended) also provides restrictions on the disclosure and manipulation of insider information inside or out - side the DIFC if the conduct affects the DIFC markets or users of the DIFC markets. It therefore governs enti - ties listed on NASDAQ Dubai. The consequences for violating these provisions are civil in nature. Article 58 of the Markets Law restricts insiders, in the DIFC or elsewhere, from dealing, directly or indirectly, or attempting to deal in an investment (ie, securities or derivatives, but excluding commodity derivatives) on the basis of insider information. Article 59 of the Markets Law prohibits the disclosure of insider infor - mation by restricting insiders from disclosing inside information to another person, other than in the nec - essary course of business. An insider is also prohib - ited from inducing or encouraging another person by direct or indirect means to deal in the investments in which the insider has inside information. Market abuse is also prohibited under the Markets Law, including making misleading statements and impressions.
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