UAE seizes $1.29bn in assets in fight against money laundering and terrorism financing

The Arab world’s second-largest economy has made significant progress in combating illicit funding in the past few years

Hamid Al Zaabi, director general of the Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism. Khushnum Bhandari / The National

The UAE has seized and confiscated assets worth more than Dh4.73 billion ($1.29bn) in the 12 months to the end of July as the Arab world’s second-largest economy steps up its fight against money laundering and the financing of terrorism.

Assets worth Dh2.54bn were seized by authorities while assets worth Dh2.19bn were confiscated in the one-year period, Hamid Al Zaabi, director general of the UAE’s Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT), told The National in an interview.

UAE authorities have also frozen assets worth more than Dh13 million during the same period as the country, a financial centre in the Middle East, prioritises AML/CFT as part of its efforts to achieve its national strategy goals.

“The UAE takes these AML/CFT matters extremely seriously and this is the reason why it came up with the idea of the executive office to take the lead [role] in the system and focus on shaping policies and strategies, co-operation and engagement,” Mr Al Zaabi said.

“So, we now have a department working on domestic compliance and co-ordination, and a department that focuses on international co-operation, AML/CFT partnerships and communication.”

The UAE has made significant progress in combating money laundering, the financing of terrorism and weapons proliferation over the past few years.

The country's Financial Intelligence Unit — the central agency that works closely with authorities to determine links between possible proceeds of crime, money laundering or terrorist financing — reported a 51 per cent year-on-year rise in the number of suspicious transaction reports (STRs) in the first quarter of this year.

The financial sector, a main pillar of the UAE economy, contributed the vast majority of those STRs, the executive office said in August.

There was also a significant rise in the AML/CFT enforcement actions in 2021, with total enforcement actions exceeding Dh42m.

Authorities in the UAE confiscated more than Dh2.35bn in illicit assets last year, of which Dh15m was in gold and precious metals.

The number of people jailed for financial crimes reached 40 and fines worth Dh860m were handed down for fraud and money laundering.

In June, Dubai Police arrested hedge fund trader Sanjay Shah on an international warrant issued by authorities in Denmark.

Skat, Denmark's tax authority, alleged that Mr Shah, a British citizen, was a central player in a scheme in which foreign businesses pretended to own shares in Danish companies, before claiming tax refunds for which they were not eligible.

Authorities also worked closely with South African officials to arrest Atul and Rajesh Gupta after Interpol issued a red notice against them for allegedly looting billions from state-owned companies.

Established in February last year, the executive office is charged with overseeing the enforcement of the UAE’s National AML/CFT Strategy and the National Action Plan (NAP), Mr Al Zaabi said.

The strategy, with 12 key goals to be achieved between 2020 and 2023, defines the UAE's approach to build an integrated system to speed up its response to money laundering crimes, as well as combat the financing of terrorism and illegal organisations.

Primarily a national policy and co-ordinating body on AML/CFT efforts, the executive office has a wide-ranging mandate to ensure the UAE has a sustainable and resilient AML/CFT framework and is currently co-ordinating with more than 80 government entities and law enforcement agencies in the country, said Mr Al Zaabi, who is the founding director general of the body.

“The EO priority is to develop [strategies] and follow up with all the government entities in the UAE on it Project Portfolio Management system (PPM), which is also used by a number of UAE ministers to have direct access to progress reports,” Mr Al Zaabi, said.

The PPM is a system “that ensures proper oversight of all agencies and maintains their compliance with the National AML/CFT Strategy and Action Plan”, he said.

Mr Al Zaabi, a senior law enforcement official with more than 20 years of experience in the fight against financial crimes and AML/CFT, has slowly built his team of experts from an initial 20 at the launch.

“Now we are talking about a team of 45 people in the executive office,” he said.

“But, at the same time we have a national group, a team [of experts], which is more than 200 people at different government entities.”

The executive office works with that group of experts and receives information that it uses in its tools and systems.

It plans to increase its staff strength to 50 by the end of this year and add another 25 experts next year, mostly compliance and data experts, he said.

The Public-Private Partnership Committee, chaired by the executive office, is co-ordinating closely with the private sector in the UAE to curb financial crimes in the country.

Through its three-year strategic plan, the committee, the first of its kind, is pushing to enhance the country's AML/CFT efforts in line with the criteria laid out by the Financial Action Task Force, he said.