Suspected money laundering cases last year hit 1,700

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The UAE detected more than 1,700 suspected cases of money laundering in 2009, The sharp increase in cases against the previous year is due to stricter compliance by banks and other financial institutions, a Central BankCentral Bank official said yesterday.

The Central BankCentral Bank said it also received more than 11,800 reports on cash declaration last year as part of its intensified crackdown on illegal money, but denied recent reports that real estate firms were being used as channels for such funds.

The head of the Central BankCentral Bank's Anti-Money Laundering and Suspicious Cases Unit (AMLSCU) said the UAE was enforcing one of the strictest legislations in the world to fight money laundering, financing of terrorism and weapons of mass destruction, tax evasion and corruption.

"In 2009, the AMLSCU received 1,729 cases of suspected money laundering compared with 1,170 cases in 2008," said Abdulrahim Al Awadi, Head of AMLSCU at the Central BankCentral Bank.

"The reason for this increase is that the UAE economy is growing and the country is becoming more open to other economies and societies. But the more important reason is the intensive training courses we are conducting for bankers and staff at other financial institutions. Banking staff have become more experienced in detecting such cases and are showing stronger co-operation with the authorities and more compliance with existing laws. Another key factor is that we have introduced stiffer laws and new mechanisms to combat money laundering," he said.

Speaking to reporters at a briefing to announce a regional anti-money laundering meeting in Abu Dhabi next week, Al Awadi said 683 suspected cases in 2009 were referred to the competent authorities for further interrogation, while 169 are now in court. The remaining cases are being investigated by the unit.

Besides such cases, the unit has also received 11,810 reports on cash declaration from all emirates under the country's existing regulations which stipulate that those who leave or enter the UAE, must declare their funds, said Al Awadi.

He added the unit had also stepped up its surveillance of funds transferred through money exchange shops and hawala systems, which are unauthorised money remittance channels.

Al Awadi noted that the UAE was now enforcing one of the strictest laws on fund remittances through money changers by imposing a declaration floor of a lower Dh2,000 as compared with at least Dh10,000 in other countries. Central BankCentral Bank inspectors also regularly visit exchange houses to enforce their compliance, he said.

"As for hawala, we are among the countries that are closely monitoring and controlling the activities of these systems. The UAE has taken a pioneering initiative to force those hawala agencies to register with the Central BankCentral Bank and has asked them to provide all details about their transactions," Al Awadi said.

"They must inform us about any suspected transfer no matter what its value. We now have more than 300 hawala traders registered with the Central BankCentral Bank. We know everything about them and those who are not registered with us are not allowed to engage in any financial or remittance activity. We are able to enforce such a rule by preventing them from opening accounts in banks."

Replying to a question, Al Awadi denied what he called recent allegations that some real estate companies in the UAE were channelling suspected funds.

"These allegations are totally untrue and have no basis. I don't take media reports about such activities [seriously] because we in the Central BankCentral Bank know better, I can assure you that these reports are baseless," he said.

"All real estate companies in the UAE are officially registered and are abiding by the law. Our anti-laundering laws cover these companies and there is no truth in what has been said about them."

Speaking to Emirates Business later, Al Awadi said the UAE would sign new memoranda of understanding (MoUs) on combating money laundering with 14 countries at next week's conference being hosted by the Central BankCentral Bank.

"It was an initiative by the UAE to sign MOUs with 92 countries. We have signed 22 such memoranda and will sign 14 more next week. The rest will be signed at a later date. We want to expand the scope of our co-operation with other nations in the fields of fighting money laundering, financing of terrorism and combating proliferation of weapons of mass destruction. Co-operation includes countering corruption and tax evasion," he said.

He said the new MOUs would be signed at the three-day anti-laundering conference with Saudi Arabia, Bahrain, Oman, Qatar, Egypt, Syria, France, Spain, Singapore, US, Finland, Greece, Mexico and Argentina. More than 500 delegates from 53 countries are expected to attend the February 17-19 joint meeting of the Financial Action Task Force (FATF) and FATF-Mena, the first plenary meeting of those groups to be held in the Middle East.

The conference will cover matters related to enhancing co-operation and co-ordination on multilateral basis among FATF bodies as well as financial crimes. Other topics include a report on high-risk jurisdiction, best practices on confiscation and cash couriers, encountering financing of proliferation of nuclear arms and other weapons of mass destruction, anti-corruption initiatives, challenges faced by FATF-Mena regions and mutual evaluations.

"Hosting this important annual event reflects the UAE's commitment to global co-operation on issues related to financial crimes and its keenness to establish a set of federal rules and regulations for encountering money laundering and combating terrorism financing, funding spread of weapons of mass destruction, corruption and tax evasion," said Awadi.

By Nadim Kawach

© Emirates Business 24/7 2010