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In light of the Financial Action Task Force’s decision to put the United Arab Emirates (UAE) on the greylist, the wealthy Middle Eastern state appears to be prioritising tough action against money laundering.
On Monday (August 8), it was announced that the UAE is to crack down further on money laundering and terrorist financing.
Payments for real-estate transactions in the UAE through virtual assets, sale of virtual assets or cash amounts above AED55,000 will now be subjected to additional reporting to authorities.
All real-estate agents, brokers and law firms, meanwhile, are now compelled to file reports to the UAE’s Financial Intelligence Unit (FIU) for purchase and sale transactions of freehold real-estate properties using cash or crypto-assets.
This puts the UAE ahead of the game in some respects, as few jurisdictions have considered legislating on the role of virtual assets in real-estate transactions.
“These new measures will improve the quality of financial intelligence available to the FIU and will be used to trace the suspicious movement of funds or investments as part of our fight against money laundering and terrorism financing,” said Ali Faisal Ba’Alawi, head of the UAE FIU.
Ba’Alawi continued: “Importantly, the requirements further strengthen the stability and integrity of the UAE’s real-estate sector and provide all stakeholders with greater transparency in a sector that is a key contributor to the UAE’s economy.”
Meanwhile, Abdulla bin Touq Al Marri, the country’s economy minister, said that moves such as this are a central focus for the government.
“The adoption of the highest standards of transparency and governance, in addition to the necessary regulations to ensure economic and financial stability while combating malpractice within the business community, are priorities of the Ministry of Economy and its partners in local, federal, and private sector entities,” he said.
The UAE faced the music in March this year when it was added to FATF’s greylist, joining the likes of Albania, Turkey and the Philippines.
There is hope, however, as quick, tough action can cause a change of mind, as Malta learned this year after it was removed from the list just 12 months after being put on it.
Since being put on the list, UAE regulators have been taking an increasingly tough stance on wrongdoers and making sure people know too.
At the end of July, the country’s central bank imposed financial sanctions on six banks operating in the UAE for failures to achieve appropriate levels of compliance regarding required due diligence and reporting procedures and standards.
The central bank said the financial sanctions take into account the banks’ failures to achieve appropriate levels of compliance regarding required due diligence, and international reporting procedures and standards.
In the same week, it also fined an exchange house for failing to effectively monitor terrorist financing risks.
The UAE’s attempts to rein in financial crime and illicit flows remain far from perfect. According to reports, the US has warned that the UAE risks becoming a hub for sanctions evaders if financial institutions are not cautious in handling Russian businesses.
