ABU DHABI, 25th August, 2022 (WAM) — The Executive Office of Anti-Money Laundering and Counter Terrorism Financing (EO AML/CTF), met on Thursday to conclude a review on progress in the first half of 2022.
Highlights Include: The UAE has signed five new international judicial cooperation agreements (IJCAs) with: the United States, Russia, Netherlands, Denmark, and Italy.
Regular strategic engagement and technical workshops have been held with the European Union (EU), the United States and United Kingdom.
The National Economic Registry now contains the ultimate beneficial ownership (UBO) of 77 percent of corporate vehicles – an important standard for transparency. Plans are in place to reach 100 percent.
Suspicious transactions reporting (STRs) increased 51 percent year-on-year (1Q21 vs 1Q22) demonstrating greater AML/ CFT understanding by private sector and monitoring by supervisory authorities.
16 government agencies and more than 20 private sector representatives have joined a Private Public Partnership to enhance effectiveness of AML/CFT regime and develop a legislation for sharing information between public and private sectors.
There have been significant AML/CFT enforcement actions Hamid Al Zaabi, Director General, said: “We have a clear agenda for combating illicit finance and preserving the integrity of the global financial system. It is anchored in embedding the institutional capabilities set out in the UAE’s National Risk Assessment, National Action Plan and National Strategy for AML/CTF. We carried the positive progress of 2021 into the first six months of this year and we take encouragement from that.
”Our priority remains to build long-term, sustainable capabilities and to accelerate the development of the UAE’s ability to detect, investigate and understand money laundering and terrorist financing as we advance financial crime compliance frameworks in the UAE and around the world.”
International Cooperation In September 2021 the UAE signed a landmark partnership with the UK to tackle illicit finance. This has facilitated new opportunities for cooperation, such as the exercise with the UK National Crime Agency to combat the smuggling of significant volumes of cash and gold from UK airports.
During the course of 2022 regular bilateral UAE-UK dialogues have been held to discuss improving information, financial intelligence and facilitating action against AML/CFT. Similar events have been held with the European Union (EU) and the United States. The UAE has also signed five new international judicial cooperation agreements (ICJAs) with the United States, Russia, Netherlands, Denmark, and Italy. During a visit to the US in July 2022, the EO led a delegation from the UAE that met with Department of Treasury, private sector entities and leading think-tanks to discuss areas of collaboration in combating money laundering, terrorist financing and proliferation financing.
Reporting of suspicious transactions and financial intelligence The UAE Financial Intelligence Unit (FIU) is the central agency that works closely with relevant competent authorities to determine links between possible proceeds of crime, money laundering or terrorist financing.
The number of suspicious transaction (STR) reports received by the FIU increased by 51 percent year-on-year (1Q21 vs 1Q22) with the financial sector contributing the vast majority. This demonstrates the success of outreach and educational programmes designed to raise and deepen AML/ CFT awareness.
The FIU was strengthened by an increase of over 85 percent in human resources and the development and adoption of new tools, which raised the effectiveness of money laundering investigations, including for predicate offences and asset-tracing.
This builds on the investments in people and technology such as the Fawri Tick system, GoAML, Integrated Enquiries Management System (IEMS) and the National Economic Registry (NER).
Efforts have also focused on improving designated non-financial businesses and professions (DNFBPs) transaction-monitoring systems. Work has also been conducted to help DNFBPs identify, assess and take effective action to mitigate their money laundering, terrorist financing and proliferation financing risks.
Targeted Financial Sanctions Authorities in the UAE have successfully carried out a number of high-profile arrests in relation to financial crime working in close cooperation with partners in Europe, Africa and the US. In addition, thorough investigation has led to the proceeds of crime being recovered, or confiscated.
Similarly, the swift implementation of targeted financial sanctions or freezing orders have also been used as key steps in the enforcement process. The UAE is committed to going further by incorporating relevant provisions to prevent terrorist financing into the new law regulating charities.
Competent authorities have also increased their understanding of targeted financial sanctions evasion typologies in both the public and private sectors. For example, the Executive Office for Control and Non-Proliferation has focused on money transfer services such as hawala, imposing dissuasive measures on firms that fail to demonstrate AML/CFT compliance. Significant fines have also been issued to some DNFBPs for breaching AML/CFT standards.
The UAE has also addressed technical deficiencies pertaining to freezing obligations in the Local List, whereby firms are required to freeze assets where the UAE authorities impose a freezing order in relation to targeted financial sanctions for terrorist financing and proliferation. In June 2021, the UAE received an upgrade in relation to this Recommendation, R.6, from MENAFATF, for the measures taken to improve the Local List system. The UAE has added 38 individuals and 15 entities to the Local List, while the UAE Cabinet approved their inclusion in the national terrorism list.
In March 2022 the UAE worked closely with international counterparties on the dual listing of individuals belonging to a terrorist group. This led to the UAE’s law enforcement agencies taking action to arrest the individuals, raid their offices and homes, and collect physical and electronic evidence.
Embedding a risk-based supervision and enforcement The UAE’s risk-based approach (RBA) is central to the effective implementation of the FATF recommendations. This includes targeted RBAs in high risk areas such as dealers of precious metals and stones. RBAs have enabled the competent authorities to target firms for inspections, encouraging remedial action where non-compliance is identified.
Total enforcement actions imposed by supervisory authorities during this period exceeded AED 42 million.
The UAE confiscated more than AED 2.35 billion (US$640 million) in illicit assets in 2021, of which AED 15 million (US$4 million) was in gold and precious metals.
The UAE has had numerous successes leading to: the arrest of a European thief who had stolen AED 3 million (c. US$ 817,000); uncover of a fraudulent scheme in cryptocurrency trading and money laundering, leading to arrests and prosecutions of the accused; and 40 people jailed and fined AED 860 million for fraud and money laundering., among many other significant arrests and international cases such as the arrest of suspect Sanjay Shah, and with South African authorities to arrest the Gupta Brothers.