FATF : UAE : MUTUAL EVALUATION REPORT ‘[The UAE]  must take urgent action to effectively stop the criminal financial flows that it attracts’ FATF Paris 30 April 2020 ‘Kleptocrats, criminals and sanctioned individuals from around the world own Dubai property … In practice, these buyers can stash or launder cash in the UAE property market, no questions asked’ - Matthew Page, a scholar with the Carnegie Endowment for International Peace Financial Times 30 April 2020. There is concern over the low number of ML prosecutions in Dubai given its ‘acknowledged risk profile’. There is considerable abuse of legal personality Principal threats are – Fraud, professional third-party ML, drug trafficking and counterfeiting. High risk sectors are – Banking, MVTS (including Hawaladars) and dealing in precious stones and metals. Colleagues need not read the lengthy FATF report which runs to 288pp – the summary is 14 pages – as it reaches its blinding obvious conclusions in painfully diplomatic language after following a laborious over engineered FATF evaluation process that took place nearly a year ago. Criminals are more agile than that – organisation is the enemy of improvisation – for organisation read ‘bureaucracy’ It is notable that the US Department of Justice and the UK HMRC took part in the evaluation as well as TRACFIN, the serious players – the report was reviewed by the Russian Federation and the IMF – and Italy. Recent anecdotal evidence of wrongdoing borders on the hilarious with claims that EY helped to cover up five tons of gold painted silver imported from Morocco, USD5 bn of cash transfers not reported to the Dubai authorities and 57 tons of gold imported from Sudan – 27 people were jailed in France.

On 17 April 2020 the High Court in London awarded the whistle-blower involved USD11 mm to be paid by EY. Gold’s importance is underscored with the financial crisis arising from the pandemic – money commentators see the crisis ending the role of ‘fiat’ currency and gold becoming literally ‘priceless’. The gold trade is reputed to be worth USD70 bn a year to the UAE. The facts speak for themselves – Effectiveness and technical compliance ratings Detailed Table at the end of this Note Effectiveness ratings Highly                          0% Substantially               9% Moderately                55% Low                             36% Technical compliance ratings For each of the 40 FATF recommendations Not compliant              0% Partially compliant      15% Largely compliant       58% Compliant                    27% Facts 2013-2018 Money Laundering Cases identified by LE                282 Cases further investigated       224 Prosecutions                               50 Convictions                                 33 [66%] Terrorist Financing Prosecutions                              92 Convictions                                75 [82%] 2019 GDP                                             USD 746bn           [PPP] GDP ranking                               33                         [PPP] Emirates                                     7 Financial Free Zones                2 Commercial Free Zones         29 Company Registries                39 Ruler’s Funds account for 18% of NPOs and is not properly investigated and is identified as having ‘greater vulnerability’ to TF Mutual Evaluation Review Assessment Team [1-18 July 2019] Lebanon                      Special Investigation Commission France                         TRACFIN Turkey                          Banking Regulation and Supervision Agency UK                                 HMR&C USA                              Dept of Treasury Reviewed by Russian Federation IMF Italy FATF Executive Summary FATF UAE Mutual Evaluation Review Executive Summary 29 April 2020 https://www.fatf-gafi.org/media/fatf/documents/reports/mer4/Executive-Summary-Mutual-Evaluation-Report-UAE-2020.pdf