Detecting financial crime, the UAE's main goal
Sheikh Abdullah bin Zayed al-Nahyan, Minister of Foreign Affairs and International Cooperation, wants to embark on an ambitious project, as Bin Zayed al-Nahyan himself has outlined in an article he wrote for Forbes Middle East. In the long term, the UAE wants to become the world's leading economy, especially in the business sector.
The article begins by mentioning the importance of the Silk Road, which passed through the land we now know as the United Arab Emirates, where traders first exchanged goods along the Silk Road. With this initiation, the minister wants to reflect his country's longstanding economic commitment to the world around them. In fact, the Arabian monarchy ranks 16th globally in the World Bank's annual ease of doing business index of 190 countries. Its ultimate ambitious economic goal is to lead the ranking of countries.
The oil-rich state wants to embark on a series of reforms to improve and encourage business growth, attract foreign investors, create jobs and diversify the economy away from oil, which are some of the measures already underway. With these initiatives, they want to make encouraging progress and become pioneering financial centres. The minister claimed to host two of the top 30 international financial centres, which are growing rapidly, as well as opportunities, but can also bring consequences and risks.
Also, the Emirati state wants to engage in more restrictive policies to combat the threat of organised crime, fraud, money laundering and corruption, according to the Minister of Foreign Affairs and International Cooperation. Money laundering is one of the main issues of concern to the country, as well as the consequences and risks it generates. The sectors most at risk of financial abuse are gold trading and real estate.
The United Nations estimates that the amount of money laundered globally is between 2 and 5 % of global GDP, equivalent to between $800 billion and $2 trillion. The UAE accounts for a small proportion of these percentages, but even so, it wants to deter illicit finance because it represents a bad international reputation for the nation and for the integrity of its financial sectors globally. The UAE's Financial Intelligence Unit, tasked with assessing suspicious activity reports, has doubled staffing levels for future investigations. From 2019 to 2021, 94 per cent of money laundering cases were convicted.
At the same time as, Bin Zayed al-Nahyan holds his ministerial post, he is chairman of the Higher Committee for the Supervision of the National Anti-Money Laundering and Countering the Financing of Terrorism Strategy (AML/CFT). As such, one of his key objectives is to "enhance the UAE's effectiveness in combating financial crime". The Central Bank, the Ministry of Justice and the Ministry of Economy have all welcomed the announcement of the new money laundering measures. In addition, special courts have been established in Abu Dhabi and Dubai, toughening sentencing for businesses in commercial centres, but especially for the largest businesses across the monarchical nation.
To implement all of the above, the state will operate around five principles: active partnership between government and industry, facilitating knowledge sharing between financial institutions, regulators and law enforcement agencies; prevention, detection and elimination of illicit activities; public-private partnership; collaboration with international partners; and conducting economy-wide risk assessments on money laundering and terrorist financing.
As a result of these measures and reforms, financial institutions, accountants, auditors, dealers in precious metals and stones, and property brokers are obliged to monitor and report all suspicious transactions. In addition, law enforcement agencies have access to a database containing all beneficial ownership information of all UAE entities. With all this, the UAE administration aims to develop an effective economy.
Minister Abdullah bin Zayed al-Nahyan hopes to achieve great economic progress through this disciplined approach, although several advances are already being made. The ultimate goal is to detect illicit financial flows in order to develop one of the strongest and most respected economies in the world today. As mentioned above, the Emirati financial system wants to be global and modern, so it needs to be protected.