Financial Crime World

Financial Crime Prevention Policies in UAE Under Scrutiny by Global Watchdog

The United Arab Emirates (UAE) has been under scrutiny for its efforts to combat money laundering and terrorist financing, according to a recent report by the Financial Action Task Force (FATF). The review highlights both progress made by the country and areas of concern that need urgent attention.

Progress Made in Strengthening Laws and Regulations

The UAE has strengthened its legal framework in recent years to tackle financial crime. This includes:

  • Strengthened laws: The UAE has introduced new laws and regulations to combat money laundering and terrorist financing, including the Anti-Money Laundering Law No. 8 of 2020.
  • Regulatory oversight: Regulatory bodies such as the Central Bank of the UAE (CBUAE) and the Financial Services Regulatory Authority (FSRA) have been established to oversee the financial sector.

Areas of Concern

Despite progress made, there are still several issues that need to be addressed:

  • Misuse of legal persons: The UAE’s extensive network of free zones has facilitated the growth of various companies, but this has also created opportunities for criminal entities to misuse legal persons.
  • Inadequate use of formal international cooperation processes: The report highlights that the UAE needs to improve its use of formal international cooperation processes to combat money laundering and terrorist financing.
  • Limited exploitation of financial intelligence: Authorities have been criticized for not fully exploiting financial intelligence to track down illicit funds.

Key Concerns

One of the key concerns is the UAE’s extensive network of free zones, which has contributed to a high risk of money laundering and terrorist financing. The report highlights that the country’s 39 company registries have facilitated the growth of various free zones, but this has also created opportunities for criminal entities to misuse legal persons.

Conclusion

While the UAE has made progress in strengthening its legal framework to combat money laundering and terrorist financing, there are still significant challenges that need to be addressed. The country must take urgent action to prevent the flow of illicit funds and ensure the effectiveness of its AML/CFT measures.