Dubai Announces New Financial Misconduct Laws With Travel Bans And Asset Freezing For Offenders

Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, has issued Law No. (24) of 2024, amending certain provisions of Law No. (4) of 2018 pertaining to the establishment of the Financial Audit Authority.

In the new Law, Articles (34), (35), and (36) of the original law have been replaced with new provisions regarding the investigation of violations and the imposition of disciplinary penalties on offending employees, as well as the establishment of a grievance committee.

Dubai finance laws

The amended Article (34) of Law No. (24) of 2024 grants the Director-General of the Financial Audit Authority the authority to take several actions against employees to address misconduct, including suspending them, confiscating relevant documents, or dismissing investigations if they are unfounded or lack evidence.

Minor violations can be dismissed with disciplinary actions instead of prosecution. If a criminal offence is confirmed, the case must be referred to the Dubai Public Prosecution. Travel bans and asset freezes can last up to three months and may be extended if necessary.

Appeals can be made after three months unless there’s a valid reason to appeal sooner. A settlement can be reached if the misappropriated funds and profits are recovered, which would close the investigation without prosecution but still allow for disciplinary actions.

Article (35) of the amended law empowers the Director-General of the Financial Audit Authority to assess whether disciplinary penalties imposed on employees are commensurate with the gravity of the violation.

If deemed appropriate, the Authority notifies the entity to approve the penalty; if not, the Director-General may request a stricter penalty, with the updated decision due to the Authority within seven days. Non-compliance results in referral to the Central Violations Committee.

Furthermore, the amended Article (35) also establishes the independent Central Violations Committee, composed of three members appointed by the Authority’s Director-General, to review cases where entities fail to comply with penalty adjustments and to address violations by senior officials.

The Committee can uphold, increase, or dismiss penalties based on evidence. Both employees and senior officials can appeal the Committee’s decisions within 15 days by submitting a grievance to the Grievances Committee as stipulated by law.

As per the amended Article (36), a permanent ‘Grievances Committee’ will be established within the Financial Audit Authority, appointed by the Authority’s Director-General.

. @HHShkMohd amends provisions of law on establishment of Financial Audit Authority in Dubai. In the new Law, Articles (34), (35), and (36) of the original law have been replaced with new provisions regarding the investigation of violations and the imposition of disciplinary… pic.twitter.com/UE3PHQyTMn

— Dubai Media Office (@DXBMediaOffice) October 30, 2024

The committee consists of a chairperson, a CEO from a government entity, and representatives from the Authority and the Supreme Legislation Committee.

The committee reviews grievances from employees and officials facing disciplinary penalties from the Central Violations Committee and addresses their objections. The chairperson of the committee will define the committee’s procedures and powers.

Decisions made by the Grievances Committee are final and cannot be appealed administratively, but appellants may seek judicial recourse.

The new Dubai Law is effective from the date of its issuance and will be published in the Official Gazette.