In November 2018, the Dubai International Financial Centre (DIFC) issued DIFC Law No. 7 of 2018 (the Operating Law) which introduced explicit whistleblowing protections and an obligation to disclose certain conduct. The Operating Law applies to any person operating or conducting business in or from the DIFC.
A whistleblower who discloses a "reasonable suspicion" of a contravention of DIFC law in good faith shall not be subject to:
- Any legal or contractual liability
- Enforcement of a contractual, civil or other remedy; or
- Dismissal or other detrimental activity from their employer
Contravention of these protections may result in a fine of up to US$30,000.
The Operating Law also includes disclosure obligations. A Registered Person (i.e. an entity incorporated or registered in the DIFC), or their auditor, must disclose any matter which "reasonably tends to show":
- Contravention of the Operating Law, and certain related legislation
- A failure to comply with an obligation set out under any such legislation; or
- Any other matter that may be prescribed in the Regulations (i.e. laws, regulations or rules made by the Board of Directors of the DIFCA under the Operating Law)
Contravention of these provisions may result in a fine of up to US$10,000. A Registered Person is also explicitly required to implement systems and procedures to ensure compliance with this obligation.
Historically, there have been limited whistleblower protections in the UAE and obligations to report wrongdoing. These protections, together with those set out in the Financial Crime Law (Dubai Law No. 4 of 2016), are a welcome development for the DIFC. While there is no definition of "good faith" or "reasonable suspicion", the Operating Law is indicative of the increased focus on governance in the DIFC, and in the UAE more generally. Entities operating in the DIFC should ensure that appropriate whistleblower policies and procedures are introduced. Further, entities should ensure that these policies are maintained, and employees made aware of them.