UAE focused on tackling illicit money, senior official says
▶ Improved status will make access to financial markets easier, UAE’s anti-money laundering agency chief tells Salim A Essaid
The UAE is working hard to ensure compliance with international standards when it comes to the fight against financial crime, Hamid Al Zaabi, director general at the Executive Office of AntiMoney Laundering and Counter-Terrorism Financing, told The National.
The Emirates was removed from the Financial Action Task Force grey list last week in what Mr Al Zaabi called a major win.
But, he added, the main target is to “meet the goals of the country, not that of the FATF”.
“The UAE successfully confiscated over Dh5.4 billion [$1.4 billion] from December 2021 to June 2023, primarily from cases related to professional and tradebased money laundering,” he said.
Arab states have specific conditions to address with regards to financial crime, said Mr Al Zaabi.
His office is focused on learning and developing an action plan to combat these illicit activities.
The UAE was added to the FATF grey list in March 2022, with the global watchdog citing risks in the banking and property sectors, as well as the diamond and gold trade.
Mr Al Zaabi said the country’s removal from the list made “no difference” to its economic well-being, but would strengthen the Emirates’ global position in the future.
The change in status enables the UAE to provide easier access to financial markets and trade opportunities, he said.
The Ministry of Economy has conducted more than 8,000 inspections aimed at curbing money laundering, resulting in authorities issuing fines worth more than Dh115 million and the seizure of Dh925 million.
By the end of last year, the UAE had signed preliminary agreements with Egypt, Morocco, Serbia and Kazakhstan to help combine efforts in the fight against financial crime.
Mr Al Zaabi said more work was needed.
“We have a very busy year ahead. Financial criminals are continually evolving their tactics and looking for gaps between national systems,” he said.
The UAE’s removal from the Financial Action Task Force grey list last week was a major win but the main target is to “meet the goals of the country, not that of FATF”, according to the official leading the nation’s fight against illicit transactions.
The aim is to continue improving the effectiveness of the UAE’s approach and framework, in line with international best practice, Hamid Al Zaabi, director general at the Executive Office of Anti-Money Laundering and Counter-Terrorism Financing, told The National.
“The UAE successfully confiscated over Dh5.4 billion [$1.4 billion] from December 2021 to June 2023, primarily from cases related to professional and trade-based money laundering,” he said.
Mr Al Zaabi is the first port of call for the FATF to learn about the progress of the UAE’s efforts to combat financial crimes, according to the executive office, which was founded in February 2021.
He said Arab countries had specific conditions to address with regards to financial crimes and the focus of his office was learning and coming up with the action plan to combat these illicit activities.
In the grey
In March 2022, the UAE was added to the grey list by the FATF, the world’s watchdog for anti-money laundering and financial terrorism, which was founded in 1989 by the G7 countries comprising Canada, France, Germany, Italy, the UK, Japan and the US.
The FATF had identified risks of money laundering and terrorist financing from industries connected to banking, diamond and gold trade as well as real estate.
Although the UAE has an increasingly regulated economy, the level of compliance with anti-money laundering and know-your-customer requirements in some sectors is perceived to be inconsistent, stated the International Fraud & Asset Tracing 2023 report by London-based research firm Chambers and Partners.
Since the establishment of the executive office, Mr Al Zaabi said his team of about 60 have worked with more than 90 national stakeholders, private sector companies and global institutions such as the World Bank and the International Monetary Fund, to ensure compliance with international standards and to enforce the national anti-money laundering and countering the financing of terrorism action plan.
“There wasn’t much communication between the different organisations beforehand,” he said.
Success in combatting crimes depended on the extensive co-operation with different entities to ensure that regulations are enacted, he added.
Mr Al Zaabi’s office developed tools such as FawriTick, an automated intelligence platform that integrates details of financial crimes with local and federal authorities to streamline decision-making.
A reporting platform also exists within the National Statistics Centre specifically to address the UAE’s needs.
The result is that the UAE has been able to more effectively monitor and exercise its regulations, Mr Al Zaabi said.
The Emirates has issued fines totalling more than Dh115 million for money laundering, conducted more than 8,000 inspections with the Ministry of Economy and has seized Dh925 million in breaches of anti-money laundering practices and procedures to date, according to the executive office.
Globally, the UAE signed anti-financial crime preliminary agreements with Egypt, Morocco, Serbia and Kazakhstan by the end of 2023.
The UAE also previously ratified extradition treaties with South Africa and Denmark. Both were intended to secure the return of high-profile people accused of significant financial crimes.
Stronger future
The UAE’s removal from the FATF’s grey list last week made “no difference” to the country’s economic well-being, said Mr Al Zaabi, yet it does strengthen the country’s position moving forward.
Due to the modified status, the UAE is set to fortify its global position with easier access to financial markets and trade opportunities, he said.
It also lowers international banking transaction costs, in addition to the UAE receiving increased co-operation and assistance from international bodies and foreign governments due to its compliance with international standards.
“Entering the green zone helps to increase the confidence of foreign countries,” Mr Al Zaabi told The National, although the UAE has no issues drawing foreign direct investment, he added.
By the end of last year, the Emirates had the second-highest value of greenfield investments, or FDI, where a parent company establishes a subsidiary in a different country, according to an Unctad report last month.
Only the US was ahead of the UAE, the report said, without providing the numbers for individual countries.
Lewis Allsopp, chairman of Dubai-based real estate agency Allsopp and Allsopp, said that previously restricted large institutional funds would probably enter the Dubai property market as a result of the country’s emergence into the FATF’s green status.
“I am confident that Dubai’s real estate market is set to benefit the most from this news,” Mr Allsopp said.
When asked about what was next after being delisted from FATF’s grey list, Mr Al Zaabi said, “more work”.
“We have a very busy year ahead. Financial criminals are continually evolving their tactics and looking for gaps between national systems,” he said, citing the UAE’s National Risk Assessment plan, which should be completed by the end of 2024.
This is especially true with the emergence of the ever-changing and high-risk cryptocurrency market, which the UAE is one of the firsts to regulate but not shy away from, said Mr Al Zaabi.
With a strong regulatory framework and a business environment conducive to innovation, the UAE will continue to be an attractive jurisdiction for virtual asset service providers, he added.
“We can’t hold it back, this is the future.”
We have a very busy year ahead. Financial criminals are continually evolving their tactics and looking for gaps
HAMID AL ZAABI
Director general at the Executive Office of Anti-Money Laundering and Counter-Terrorism Financing