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02 March 2024

UAE steps up war on money laundering

UAE has been active against money laundering (Supplied)

By Nadim Kawach

The Central Bank on Monday signed a landmark deal with a government department that oversees nearly 56 customs points as part of an intensifying battle against money laundering and financing of terrorism.

The Anti-Money Laundering and Suspicious Cases Unit (AMLSCU) at the Central Bank finalized the memorandum of understanding (MoU) with the Federal Customs Authority (FCA), their first since the UAE spearheaded regional efforts in enacting anti-money laundering laws in late 1990s.

Signatories said the agreement would enhance cooperation between the two sides and help block any loophole in the enforcement of anti-laundering law.

While the deal means tighter declaration systems at customs points, they stressed that it would not harm the UAE’s policy of free capital transfer.

“The agreement demonstrates the commitment of AMLSCU to enhance cooperation with its domestic strategic partners to coordinate the efforts on encountering money laundering and combating terrorist financing and related crimes,” said Abdul Rahim Al Awadi, Executive Director and Head of AMLSCU.

“It will allow us to exchange information on all issues related money laundering and financing of terrorism…it is in line with international regulations that require nations to update their systems on a regular basis.”

Awadi said the UAE would remain committed to the declaration system it introduced three years ago, adding that the agreement would give a strong push that system. But he stressed this would not affect its liberal financial policies.

“We are continuously update this declaration system and regularly follow up international developments in this respect so we can block any loophole in the system…we are fully committed to this system,” he said.

“But I want to assure every one that this does not mean that if we ask for declaration, this means we are suspicious…..we just want to follow international standards in this regard…the UAE remains fully committed to its policy of free movement of capital and transfer of funds.”

FCA acting general manager Khaled Al Bustani said the agreement with the Central Bank defined a “framework for cooperation” between the two sides, adding it would enhance the FCS’s three-tier strategy based on encouraging trade, controlling illegal practices and expanding cooperation with the UAE’s competent authorities on fighting money laundering and terror funding.

“This MoU will also reduce bureaucracy and ensure continuous contacts and consultations with the AMLSCU…this will make our role more effective.”

He said the deal would contribute to “protecting the UAE from any illegal and criminal practices”, adding that this would serve the domestic economy and trade, ensure discipline at the country’s outlets and improve its image.

“Protecting our society against any illegal activity and expanding economic and commercial cooperation with other countries is a strategic goal for FCA…we have and will continue to play a vital role in curbing fraud, smuggling, money laundering, terrorism funding and other illegal operations,” he said.

“This agreement is within the framework of our plans to expand our cooperation and coordination with all relevant parties in the country with the aim of upgrading our performance, safeguarding the society against illegal activities, improving the UAE’s image, and enhancing cooperation with the outside world.”

In recent comments, Awadi said the UAE would intensify its war on money laundering with the signing of anti-laundering agreements with more than 90 countries. The AMLSCU has already signed MoUs with nearly 25 nations and organizations and is in contact with others to finalise such deals.

Speaking at a conference at the Central Bank recently, he said improved rules and strong cooperation with local banks and foreign countries allowed the UAE to detect more cases of money laundering and other financial crimes last year.

His figures showed 1,729 suspected laundering cases were uncovered in 2009 while the Central Bank received over 11,800 reports on cash declaration.

 “There was an increase…the reason is that the UAE economy is growing and the country is becoming more and more open to other economies and societies…but the more important reason is the intensive training courses we are holding for bankers and staff at other financial institutions,” he said.

“They have become more experienced in detecting such cases and are showing stronger cooperation with the authorities and more compliance with the existing laws…another key factor is that we have introduced stiffer laws and new mechanisms to combat laundering.”

In a study early this year, the International Monetary Fund (IMF) hailed the UAE’s efforts to combat money laundering and other illegal financial activities but urged the country to upgrade its financial intelligence unit and other relevant bodies.

It noted that the rapid expansion in the country’s free zones and an influx of foreign capital into these zones pose another challenge to the UAE’s anti-laundering law, which was enforced nearly a decade ago.