A recent report published by the Financial Action Task Force (FATF) has identified several weaknesses in the UAE’s anti-money-laundering framework. Transparency International (TI) has noted its concerns with the UAE too.
One of the major issues is the numerous different company registries operating in the UAE. According to TI, a single, central register is crucial to fight financial crimes. Another weakness is the UAE’s construction and real estate sector, which is highly vulnerable to money-laundering. Further, the UAE authorities are not collaborating efficiently with international partners despite the country being an international trade hub.
Indeed, the UAE has been marred with many a financial scandal in the past few years. In one case, the daughter of a former Angola president misappropriated millions by transferring the money to a Dubai company. Similarly, under the Russian Laundromat money-laundering scheme, over 150 companies in the UAE received illegal funds. In another case, Samherji, an Icelandic fishing company, paid over $10 million in bribes to Namibian government officials by transferring the money to a shell company in Dubai. In yet another scandal, Nigerian and Armenian Politically Exposed Persons (PEPs) bought luxury property in Dubai to launder money.
Clearly, the UAE must take action to ward off such transnational corruption schemes. TI suggests that one important step in this direction is to make company structures transparent. Moreover, it is important to centralise company and beneficial ownership data in one publicly-accessible register. The UAE must also hold professional enablers accountable. Additionally, it must collaborate with international partners to identify and investigate corruption-related money-laundering. Lastly, investigations of financial crimes must not face any political interference.