UAE issues more than Dh115 million in fines in Q1 of 2023 to combat money laundering

Assets worth Dh925 million seized from November 2022 to February 2023

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 issued fines of more than Dh115 million ($31.3 million) in the first quarter of the year to combat money laundering.

This is a sharp increase from the Dh76 million issued last year.

News agency Wam has reported 161 fines were handed out to 76 entities in the first three months of 2023.

Confiscations have also increased, with frozen assets surpassing a value of Dh925 million seized from November 2022 to February 2023.

The Emirates has made progress in fighting money laundering and terrorist financing, after the Financial Action Task Force (FATF) included it on its 'grey list' - a list of jurisdictions that face increased monitoring - last year.

Hamid Al Zaabi, director general of the Executive Office for Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT), told Wam his organisation was closely working with the Financial Action Task Force, the global money-laundering and terrorist-financing watchdog.

He said the UAE was an important trade and investment hub and the federal government was working closely with authorities across the country and the private sector to ensure that all entities were implementing effective AML/CFT measures.

The UAE economy grew 7.6 per cent last year, Ministry of Economy figures show, and is expected to grow 4.1 per cent in 2023, according to the World Bank.

“While our investment in the national AML/CFT framework is long-term in nature, we are already seeing improvements across the entire system," Mr Al Zaabi said.

"If we take compliance as an example, the private sector has adopted better procedures in response to supervisory policies and requirements, and awareness of financial crimes has drastically increased, indicating a responsive, cohesive and dynamic system.”

Mr Al Zaabi highlighted some of the main achievements of the past year, including the UAE's ranking as fifth globally in confiscations and arrests as a percentage of the country's total expected financial crime value.

Emirati law enforcement agencies have contributed to major international investigations and arrests, including the largest drugs ring in Europe and Interpol's most-wanted trafficker Kidane Habtemariam.

The Financial Intelligence Unit received nearly 7,000 suspicious transaction reports and suspicious activity reports (STR/SAR) from relevant entities across financial institutions and Designated Non-Financial Businesses and Professions (DNFBP) in the first two months of 2023, an increase of 81 per cent from the previous year.

STR/SAR submissions from DNFBP, including exchange houses, cash service providers, precious metals and stones dealers, property and virtual asset service providers, increased by 91 per cent.

There were several major changes to anti-money laundering legislation last year, including those that affect virtual assets.

The Executive Office’s Policy and Risk Department has also successfully completed various policy papers relating to key sectors such as art, antiques and cultural objects.

Mr Al Zaabi said during Q1 of 2023, all supervisory authorities were active, with the UAE Central Bank leading the way. It conducted 464 off-site and 128 on-site inspections, issuing fines worth nearly Dh70 million. The Ministry of Economy also conducted 4,344 off-site inspections and 3,360 on-site inspections, and issued fines amounting to Dh16.5 million.

He said the UAE signed 44 bilateral Mutual Legal Assistance Treaties and sent out 327 requests for information to foreign counterparts through various channels. The UAE works closely with its partners in the US, European Union and Gulf region through working groups, task forces and capacity-building exercises.

The Executive Office has also conducted outreach sessions for more than 17,000 public and private-sector personnel to share risk-assessment outcomes and other relevant information.

"We will continue to enhance the UAE’s national risk and compliance framework so that there can be no place for financial crime within our borders," he said.

"The world of financial crime is fast evolving and truly global in nature, meaning that only by collaborating with international partners is it possible to defeat sophisticated cross-border networks."

The Association of Certified Anti-Money Laundering Specialists will hold its 14th Annual Anti-Money Laundering and Anti-Financial Crime Conference in November in Dubai. Top regulators and financial industry leaders are to converge. The event will provide the latest insight along with practical takeaways to fight financial crime.