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UAE failing to stem money laundering and terrorist financing, says watchdog 

April 30, 2020 at 3:59 pm

UAE Dirhams [SimonQ/Flickr]

The United Arab Emirates will be placed under a year-long observation by a global finance watchdog for failing to stem money laundering and terrorist financing. Abu Dhabi, says the Paris-based Financial Action Task Force (FATF), is not doing enough and has been urged to take extra measures to avoid being included on an international watchlist.

“Generally, fundamental and major improvements are needed across the UAE in order to demonstrate that the system cannot be used for money laundering and terrorist financing,” said FATF in a report compiled after a 14-month investigation.

Major improvements are required in 10 of 11 areas evaluated for preventing money laundering, the financing of terrorism and weapons of mass destruction, the report concluded. The UAE was given a “low” rating by the multinational body for investigation and prosecution of money laundering and a “moderate” rating for preventive measures and financial sanctions related to countering the financing of terrorism.

READ: UAE probes Pakistan bank for financing terrorism, money laundering

If the UAE fails to demonstrate improvement during the period of observation by FATF it will be placed alongside states such as Syria, Yemen and Pakistan, which the watchdog deems to have “strategic deficiencies”.

The real estate sector of the oil rich Gulf state is said to be prone to corruption and a safe haven for ill-gotten gains from across the globe. “Kleptocrats, criminals and sanctioned individuals from around the world own Dubai property,” Matthew Page, a scholar with the Carnegie Endowment for International Peace is reported saying in the Financial Times. “In practice, these buyers can stash or launder cash in the UAE property market, no questions asked.”

READ: Amnesty International condemns UAE crimes against its people

An area of particular concern was the investigation of and prosecution for money laundering related to high risk crimes. The report found that there was a “noticeable absence” of consistent investigations in this area.

In January, former Malaysian Prime Minister Najib Abdul Razaq reportedly sought the help of Abu Dhabi Crown Prince Mohammed Bin Zayed to conceal links to a multibillion-dollar corruption case in which he was implicated.