Governments around the world continue to place corporate crime at the top of their enforcement agendas, and the United Arab Emirates (UAE) is no exception. The country’s recent removal from the Financial Action Taskforce's (FATF) ‘grey list’ is demonstrative of the UAE's continued efforts to combat bribery and corruption, and money laundering. 

In this update, we delve into the UAE's life sciences sector, examining recent trends designed to tackle bribery, corruption, and money laundering, and the developments that we expect to see moving forward.

Wider context

The life sciences sector can be particularly susceptible to bribery and corruption. For example, it can be a challenge for those operating in healthcare to seek to ensure that the interactions with healthcare professionals (HCPs) remain ethical and compliant with industry standards, global and local laws. This can be particularly so for pharmaceutical companies that operate in a market via distribution agents (this being a common arrangement that we see in the Middle East). Reliance on a distributor can lead to the pharmaceutical company having limited visibility over the 'on the ground' interactions with HCPs. Regular compliance audits and the provision of appropriate training across the supply chain can help minimise these risks. The UAE has recently taken steps to strengthen the regulation of HCP interactions and announced that a new Code of Ethics would be published in the near future.[1] DLA Piper's Life Sciences team has also produced a Global Compliance Guide for Engaging HCPs in over 35 jurisdictions around the world (including the UAE). To access the guide, click here. 

The diversion of pharmaceuticals also poses a significant risk to the sector. Diverted pharmaceuticals tend to be legitimate prescription drugs obtained illegally through theft or fraud, which are then sold onto secondary markets. Fraudulent paperwork is often used to reintroduce the drugs into the legitimate marketplace, and counterfeit drugs are sometimes included with the diverted batches to maximise profit.[2] The UAE has previously been identified as a transit economy for diverted and counterfeit drugs,[3] but in recent years it has increased its commitment to preventing and detecting the diversion of pharmaceutical products, as evidenced by the creation of an independent drug regulator, the Emirates Drug Establishment (EDE) in December 2023. Dr Fatima Al Kaabi, Director General of the EDE, described pharmaceutical security (via the development of a national pharmacovigilance system) as one of four key priorities of the EDE.[4] 

Similarly, the life sciences sector is susceptible to money laundering and terrorist financing. A number of not-for-profit organisations (NPOs) operate in the life sciences sector. The likelihood of significant donations to these NPOs from third parties is one example of a "red flag" that increases the risk of money laundering in the sector. Organised crime or terrorist groups can also present as legitimate NPOs, deceiving donors into funding their illegal activities.[5] The FATF has praised the UAE's measures implemented to promote effective monitoring of NPOs and its policies to promote accountability, integrity and public confidence in its NPOs. For example, NPOs must make any international transfer of funds via the UAE Red Crescent, and the UAE Ministry of Community Development (one of the NPO regulators in the UAE) can force the liquidation of an NPO if it finds that the funds have not been used for the intended purpose of the NPO.[6] 

As a growing hub for life sciences and a gateway for investment in Africa and the wider Middle East, the UAE is committed to protecting the integrity of the financial system and providing a safe place for life sciences companies to invest and do business. The UAE has made significant strides in recent years to address the strategic deficiencies in its anti-money laundering (AML) and counter-terrorist financing (CTF) frameworks which ultimately led to the removal of the UAE from FATF's grey list.[7] We do not expect the UAE's removal to slow the pace of efforts by the country's government bodies and regulators, who are keen to demonstrate the continued zero-tolerance policy for money laundering and minimise the risk of the UAE being re-listed.

Investigations and enforcement

The introduction of an indefinite term of imprisonment for public officials and employees of international companies who are convicted of bribery offences,[8] and increased levels of fines for companies[9] have fortified the existing enforcement mechanisms for bribery in the UAE. These enhancements are intended to incentivise companies to actively put adequate measures in place to seek to prevent corruption and bribery. 

Domestic AML enforcement actions are also rising as the UAE doubles down on its efforts to tackle money laundering and financial crime. In a recent interview, Hamid Al Zaabi, the Director General of the Executive Office for Anti-Money Laundering and Counter-Terrorist Financing (EO AML CTF), emphasised the significant increase in enforcement activity in the UAE.[10] From January to October 2023, the value of fines imposed by regulators in the context of AML/CTF violations reached AED 249.2 million (US$67.9 million), three times higher than the value of fines imposed in 2022. 

The increase in fines and penalties levied in the UAE is a clear attempt by the government to increase deterrence. Greater numbers of publicly issued statements and press releases about investigations and enforcement also represent a marked shift towards greater transparency in government actions and is a further example of the government seeking to deter bad actors. This mirrors the approach taken by regulators and enforcement agencies in other jurisdictions, such as the US and UK, as the UAE seeks to raise awareness of the compliance standards expected and deter future misconduct.

International cooperation

In addition to domestic enforcement action, the UAE has continued to foster close relationships with regulatory bodies and enforcement agencies around the world. By way of example, the UAE has entered into more than 40 Mutual Legal Assistance treaties designed to tackle money laundering, terrorist financing and predicate crimes. Over 200 assistance requests were issued under these treaties between January to October 2023, and all sectors saw an increase in suspicious transaction/activity reports in the same period, indicating the UAE’s willingness to cooperate on an international bases with the enforcement and prosecution of crimes.[11] 

In order to improve the UAE's technical compliance with international treaties and recommendations, two new committees and a General Secretariat were established through legislation published on 31 July 2024.[12] The National Committee for AML, CTF and Financing of Illegal Organisations (National Committee) will be responsible for aligning all entities in the UAE to national and international standards of AML/CTF, and the Supreme Committee for Oversight of the National Strategy for AML and CTF (Supreme Committee) will have a supervisory role over the National Committee. The day-to-day operations of the National Committee (i.e., monitoring compliance) will be managed by the General Secretariat, whereas the Supreme Committee will have the power to issue decisions, guidelines and propose draft laws related to AML/CTF. It will also oversee the preparation of a Mutual Evaluation Report to assess the UAE's compliance with international standards.[13]

Further, the EO AML CTF recently announced that the UAE would be hosting, for the first time, the Asia/Pacific Group on AML Annual Meeting and Technical Assistance and Training Forum in Abu Dhabi in September 2024.[14] 

Whistleblower protection

The UAE has also taken positive steps to enhance protections for whistleblowers. Of note are the efforts made by the two financial free zones in the UAE: the Dubai International Financial Centre (DIFC) and the Abu Dhabi General Market (ADGM). The ADGM has released two new regulations granting greater protection to whistleblowers, reinforcing the non-binding principles which currently apply to entities operating in this free zone. The new regulations came into effect on 5 July 2024 and provide whistleblowers with immunity from civil or contractual liability arising from a "protected disclosure", as well as protection against dismissal or unfair treatment connected to the disclosure. Sanctions for non-compliance include a private or public warning, financial penalty, or suspension or withdrawal of the entity’s license to operate in the ADGM.[15] For more information on the new ADGM whistleblower regulations, click to read this article.

The ADGM’s new regulations mirror the whistleblowing regime applicable to the DIFC.  The Dubai Financial Services Authority (DFSA) requires DIFC regulated entities to implement "appropriate and effective measures" to facilitate (i) whistleblower anonymity, (ii) written records of all allegations, (iii) an internal and escalation process, and (iv) employee awareness of the protections available to whistleblowers. 

Going forward

The UAE continues to drive forward local and global anti-corruption and AML strategies at pace.

Life sciences organisations operating in the region should continue to monitor and assess their individual risks and compliance with the country's evolving regulatory framework.  Companies operating in the UAE should keep in mind the increased risk of enforcement action and sharing of information between regulators and enforcement agencies when making decisions concerning voluntary disclosures of potential compliance issues in one or more jurisdictions.

Other prudent steps include focusing on the effectiveness of internal compliance measures, introducing comprehensive policies around whistleblower protection, and embracing technology as a tool for compliance and anti-corruption efforts, taking into account not only the specific risks the company faces by operating in the life sciences sector but also the UAE’s national risk assessment. In the event that multijurisdictional violations or issues are identified, companies should swiftly move to adopt a coordinated, responsive strategy across the relevant jurisdictions.

If you have any questions about the implications of these issues for your business, please reach out to the authors. 

[1] Federal Decree-Law No.6/2023; Ministerial Resolution No. 1448/2017.

[2] Reuters (2024) ‘Novo Nordisk tackles harm from Ozempic fakes with global authorities’. Available here: Novo Nordisk tackles harm from Ozempic fakes with global authorities | Reuters.

[3] OECD/EUIPO (2020) Trade in Counterfeit Pharmaceutical Products Report. Available here: (oecd-ilibrary.or https://www.oecd-ilibrary.org/sites/a7c7e054-en/index.html?itemId=/content/publication/a7c7e054-eng).

[4] US-UAE Business Council (2024) ‘Dr Fatima Al Kaabi briefs industry on new Emirates Drug Establishment.’ Available here: https://usuaebusiness.org/events/dr-fatima-al-kaabi-briefs-industry-on-new-emirates-drug-establishment/.

[5] FATF Best Practices Combatting the Abuse of Non-Profit Organisations (Recommendation 8).

[6] Ibid.

[7] Outcomes FATF Plenary, 21-23 February 2024 (fatf-gafi.org).

[8] Article 275 and 276, Federal Decree-Law No. 31/2021.

[9] Article 66, Federal Decree-Law No. 31/2021.

[10] Emirates News Agency (2024) ‘UAE plays leading global role in combatting financial crimes: Hamid Al Zaabi’, Available here: https://wam.ae/en/article/b1t56ce-uae-plays-leading-global-role-combating-financial.

[11] Emirates News Agency (2024) ‘UAE plays leading global role in combatting financial crimes: Hamid Al Zaabi’, Available here: https://wam.ae/en/article/b1t56ce-uae-plays-leading-global-role-combating-financial.

[12] Federal Decree No.7/2024 Regarding AML.

[13] UAE Tightens Anti-Money Laundering Laws, Forms New Committees to Fight Financial Crime [Lexis® Middle East] (lexismiddleeast.com).

[14] EO AMLCTF (2024) ‘UAE to host 2024 Annual Meeting of Asia/Pacific Group on Money Laundering, a regional first’ Available here: UAE to host 2024 Annual Meeting of Asia/Pacific Group on Money... (amlctf.gov.ae).

[15] ADGM Public Consultation (2024) Paper 2, Annex A, Whistleblower Protections Regulations.