While the UAE’s international free zone is a hub for legitimate trading and finance, it also poses some challenges. These include the risks of terrorist financing, money laundering, and terrorist activities. Because of these complexities, the UAE’s free zone authority must balance its economic benefits against the money laundering and terrorist financing risks. This means that the UAE has a responsibility to ensure that its operations comply with the law.
Regulate trade and finance flow
The main role of an international free zone authority in Dubai is to regulate trade and finance flow within the area. Regulatory arbitrage is one of the biggest challenges of free trade zones, and this lack of oversight has been noted by the Financial Action Task Force (FATF) since 2008. The primary responsibility of the international free zone authority is to facilitate trade, monitor financial flows, and curb illicit activities. Even though the authorities are responsible for overseeing foreign direct investment, they are not national watchdogs.
Authority is responsible for regulating legal requirements
There are a few ways to navigate this complexity. Using a free zone’s website is essential in learning more about the legal requirements in a particular region. The World Customs Organization has issued reports about the free zones in the UAE, and the International Free Zone Authority is responsible for regulating them. However, the UAE Commercial Agency Law is complicated and often contradicts the free zone’s rules and regulations. Ultimately, a good idea is to seek professional advice before embarking on a significant business venture in an international city.
Authority must adhere to the laws and regulations of the country
In addition to its responsibilities, the International Free Zone Authority in Dubai must adhere to the laws and regulations of the country. For example, a free zone authority must comply with the regulations of the Department of Economic Development and provide information to the UAE Central Bank. In the UAE, a free zone authority may also be required to share financial intelligence information with the Central Bank of the UAE. As long as the authorities ensure the transparency of the data provided, they will be able to make informed decisions regarding the future of the country’s financial infrastructure.
Similarly, the UAE government’s civil legal frameworks are less restrictive, making them more favorable for illicit financial activity. It is also important to ensure that businesses in the UAE follow the Product Safety Law. TBML is an illegal activity that can lead to massive losses for both the country and the government. To avoid this, the international free zone authority must strictly enforce the laws and regulations about the products sold in the country.