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UAE progresses in countering financial crimes in H1 2023, says official

The UAE continues to prioritize international cooperation to combat financial and organized crime. (WAM)
  • The UAE confiscated over US$356 million from March 2023 to mid-July 2023, thereby strengthening its financial system.
  • The country continues to prioritize international cooperation to combat financial and organized crime.

ABU DHABI, UAE – Director-General of the Executive Office of Anti-Money Laundering and Counter Terrorism Financing (EO AMLCTF) Hamid AlZaabi said that in H1 2023, there has been a significant improvement across the board on the issue of AML/CFT in the country.

In a statement to the Emirates News Agency (WAM), AlZaabi said that a comprehensive review of reveals the robustness, responsiveness and effectiveness of the UAE national AML/CFT system.

During this period, the UAE has continued to implement the National Action Plan and National AML/CTF Strategy and is resolutely pursuing its agenda for combating illicit financing and preserving the integrity of the global financial system.

He said that these efforts have substantially increased key performance indicators, enforcement actions, inspections by supervisory authorities, and confiscations.

He added that the UAE confiscated over US$356 million (AED1.309 billion) from March 2023 to mid-July 2023, reaffirming its commitment to strengthening its financial system.

AlZaabi said that the UAE will continue to build its long-term, sustainable AML/CTF capabilities to detect, investigate and understand money laundering and terrorist financing and will continue to broaden its international cooperation.

He said, “The UAE’s participation in the Eurasia Group plenary was followed by granting official observer status at the Asia/Pacific Group plenary.”

He added, “The UAE FIU (Financial Intelligence Unit) hosted the 2023 annual meeting of the Egmont Group in Abu Dhabi, a global organization that facilitates the exchange of information, knowledge and cooperation amongst 170 member FIUs.”

AlZaabi said that the achievement of the first quarter included the participation of a UAE delegation led by the EO AML/CTF for the first time in plenaries of two FATF-Style Regional Bodies: the Asia/Pacific Group (APG) and Eurasia Group (EAG).

He added that supervisors of Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFPBs) imposed collective fines of over US$54 million (AED199 million).

In H1 2023, , DNFBP submissions increased by 14 percent and DPMS submissions by 23 percent.

The Director-General said that in Q2 2023, the number of inspections (69,407) surpassed the total number of inspections in 2022 (67,097), an increase of 108 percent compared to the first quarter of 2023.

He mentioned that the private sector reporting of Targeted Financial Sanctions (TFS) and Terrorist and Proliferation Financing (PF/TF) – related Suspicious Transaction Report / Suspicious Activity Report (STRs/SARs) to the FIU has increased.

Statistics from March-June 2023 show an approximate increase of 93 percent on the previous reporting period.

He said that since March 2023, the Executive Office for Control and Non-Proliferation (EOCN) conducted four training sessions for nearly 4,000 private and public sector professionals on TF/PF.

The Director-General said that the UAE continues to prioritize international cooperation to combat financial and organized crime.

This includes several high-profile cases of investigations, arrests and extradition agreements between the UAE and other jurisdictions.

He added that the UAE has successfully signed 45 Mutual Legal Assistance (MLA) treaties in line with efforts stated by the Ministry of Justice in its guide to international judicial cooperation in criminal matters.

One MLA treaty was signed with Turkey and further treaties are being developed.

He added that from March 2023 to mid-July 2023, the UAE sent 82 outgoing MLA requests to 34 countries.

He said the UAE invests significant resources into increasing the capacity of nationwide and regional supervisors to ensure that FIs and DNFBPs are compliant with AML/CFT requirements.

He added that from February to July 2023, the UAE has continued to intensify its outreach and awareness-raising initiatives, conducting 12 sessions that reached over 18,000 personnel across the public and private sectors.

The Director-General said that by July 14, the MOE had completed 52 percent (1,737 out of 3,360) of on-site full-scope inspections of high-risk DNFBPs and prioritized these on-site inspections based on the risks and size of the sectors.

He said that between March 2023 and June 2023, the CBUAE completed 30 on-site reviews and finalized 57 on-site reviews this year.

Inspections undertaken during the current reporting period resulted in 385 remedial actions identified, and 28 Remedial Mitigation Plans were issued to CBUAE regulated entities.

AlZaabi said that supervisory authorities continue to invest in their human resources.

Investigations and prosecutions

AlZaabi said the UAE’s system to effectively investigate ML offenses and swiftly impose proportionate sanctions continues to improve.

He said that between March and mid-July 2023, the UAE has prioritized investigations and prosecutions of large-scale, complex ML cases. During this period, 183 ML cases were launched nationally by the relevant investigation and prosecution authorities.

He added the UAE maintained a 92.1 percent conviction rate in ML cases between March 2023 and mid-July 2023, landing 76 convictions during the same period. Approximately 45.3 percent of the police investigations were generated by formal and informal international cooperation, such as incoming MLA requests, FIU-to-FIU, and police-to-police cooperation.

AlZaabi said that confiscating illicit proceeds is a high priority for the relevant authorities to ensure that the criminal funds are confiscated and prevented from entering the financial system again, deterring further criminal activity.

The Director-General said the UAE has made significant investments to improve the FIU’s capabilities and efficiency and is seeing significant improvements in the prosecution of financial crimes.

He said the UAE treats TF and PF risks seriously. Highly prioritized efforts and activities ensure that terrorist financiers are prevented from raising funds – either via the private or the non-profit organization (NPO) sector – and that the entities and individuals engaged in the proliferation of weapons of mass destruction are prevented from doing so in accordance with UNSCRs.

Since March 2023, four training sessions have been conducted and attended by 4,000 participants, focused mainly on international CPF obligations, compliance best practices, and typologies.

He said the private sector’s reporting of TFS PF/TF – related STRs/SARs to the FIU – has increased compared to the past two reporting periods. Statistics from March to June 2023 show an approximate increase of 93 percent and 96 percent in STRs compared to the past two reporting periods (Jul – Oct 22 and Nov 22 to Feb 23, respectively).

He added that supervisors and all AML/CFT authorities are actively coordinating and participating in the ongoing process to update the second National Risk Assessment launched in October 2022.