Hamed Al Zaabi discusses the UAE's impressive accomplishment in preventing the financing of terrorism
The UAE has achieved tremendous strides in the previous year in battling money laundering and terrorist financing, according to Hamid AlZaabi, Director-General of the Executive Office for Anti-Money Laundering and Counter Terrorism Financing (AML/CFT).
During its most recent meeting, the Financial Action Task Force (FATF) recently praised the nation's advancement. The Executive Office is committed to accomplishing all of the goals contained in the UAE Action Plan and is cooperating closely with the FATF to put it into action.
Al Zaabi stated in an interview with the Emirates News Agency (WAM) that the UAE has adopted a whole-of-government approach and is closely collaborating with authorities throughout the UAE and the private sector to ensure that all entities are putting appropriate AML/CFT measures into place.
In Q1 2023, as opposed to Q1 2022, UAE supervisors handed out 161 fines to 76 organisations totaling more than AED115 million. Additionally, there have been more confiscations, with assets exceeding AED 925 million being taken from November 2022 to February 2023.
As one of the most significant trade and investment hubs in the world economy, the UAE, according to him, has adopted a whole-of-government strategy. This means that in order to make sure that all organisations are putting into place efficient AML/CFT procedures, the federal government closely collaborates with authorities throughout the UAE and the business sector.
According to data from the Ministry of GDP, the UAE's GDP expanded by 7.6% in 2017; the World Bank predicts that it will expand by 4.1% in 2023. The ability of businesses to conduct business with confidence and trust, as well as the protection of the UAE economy, have positive social and economic effects.
"While the national AML/CFT framework is a long-term investment for us, we are already noticing benefits throughout the system as a whole. A responsive, coherent, and dynamic system can be shown, for instance, in the private sector's adoption of better practises in response to regulatory regulations and standards and the public's sharply enhanced knowledge of financial crimes.
Al Zaabi outlined some of the major accomplishments of the previous year, such as the UAE's status as sixth globally in terms of seizures and arrests as a proportion of the nation's overall estimated financial crime value. The largest heroin ring in Europe and Kidane Habtemariam, who was on INTERPOL's most wanted list, were both arrested thanks to contributions from Emirati law enforcement authorities.
In the first two months of 2023, the Financial Intelligence Unit received nearly 7,000 reports of suspicious transactions and activities from relevant parties across financial institutions and Designated Non-Financial Businesses and Professions, an increase of 81% from the prior year. The number of DNFBPs that submitted STR/SARs climbed by 91%, including exchanges, cash service providers, precious metals and stone dealers, real estate agents, and virtual asset service providers.
He claimed that the Executive Office had contacts with a variety of industries, especially those that the National Risk Assessment had classified as high-risk. The PPP Sub-Committee of the UAE has worked to integrate the public and private sectors through this structure. And as was already indicated, by signing more MLAs and more STR/SARs involving foreign firms, it has coordinated with global efforts.
He stated that the adoption of Cabinet Resolution 111 regarding the regulation of Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs) in 2022 was one of several significant changes to AML legislation that the EO is currently working on implementing in collaboration with competent authorities.
By outlining and defending the rights and obligations of all pertinent parties, the resolution creates the regulatory foundation for the VA sector in the UAE. The Federal Decree Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organisations is also enforced, ensuring that the UAE's VA industry adheres with its requirements.
He pointed out that the UAE's Public-Private Partnership Sub Committee (PPPSC), a crucial link between business companies and government bodies, receives its secretariat from the Executive Office. The PPPSC has finished its first consultative paper on the sharing of tactical information; the conclusions will be used to develop suggestions for legal reform that will let members to share sensitive information while still preserving their right to privacy.
Looking ahead, the Policy and Risk Department of the Executive Office has successfully finished a number of policy documents dealing to important sectors like Art, Antiques, and Cultural Objects (AACOs). When additional legislative reforms are implemented, the suggestions will be carefully taken into account.
Al Zaabi emphasised that the UAE watchdogs continue to carry out risk-based inspections in accordance with logical Targeted Financial Sanctions criteria. All regulatory bodies were active in the first quarter of 2023, with the Central Bank of the UAE taking the lead. It carried out 128 on-site inspections and 464 off-site inspections, issuing fines totaling about AED 70 million as a result. Additionally, the Ministry of Economy carried out 3,360 on-site inspections and 4,344 off-site inspections, issuing AED 16.5 million in fines as a result.
To ensure adherence to national Ultimate Beneficial Ownership (UBO) requirements, the Ministry of Economy is actively collaborating with registrars on a risk-based inspection programme in addition to inspections.
Al Zaabi mentioned that the UAE had issued 327 information requests to foreign colleagues through various channels and had signed 44 bilateral Mutual Legal Assistance Treaties. Through working groups, task forces, and capacity-building activities, the UAE maintains tight ties with its allies in the United States, the European Union, and the Gulf area.
Additionally, the Executive Office has held outreach events for more than 17,000 employees in the public and commercial sectors to communicate sectoral risk assessment findings and other pertinent data. Under the auspices of H.H. Sheikh Abdullah bin Zayed Al Nahyan, Minister of Foreign Affairs and International Cooperation, the UAE held the 2023 MENAFATF Typologies and Capacity Building Workshop in March, which attracted the participation of more than 100 delegates from more than 20 countries.
"In addition, in 2022, the UAE FIU completed three strategic analysis projects on fraud crimes, trends, and typologies; dealers in precious metals and stones; customs-related ML, and a white paper on Far East typology patterns and schemes," he continued.
AlZaabi responded, "We are working closely with the Financial Action Task Force on the delivery of the UAE's action plan," when asked about the outcomes of the FATF statement and the group's praise of the UAE's strong progress in AML/CFT. We are dedicated to ensuring that all criteria on the plan are met and were heartened by the FATF Plenary's positive comments on the UAE's "significant progress" in February 2023.
"The FATF track is part of a long-term strategy to implement a reliable and strong AML/CFT system, and we will keep growing and improving our capabilities in the years to come. We are committed to combating financial crime because we firmly believe that doing so will advance economic development, boost trade and investment abroad, and safeguard the stability of the international financial system.
Al Zaabi outlined the major goals of the EO for 2023, saying, "First and foremost, we will keep improving the UAE's national risk and compliance framework to ensure that financial crime has no place within our borders. We put in a lot of effort to safeguard the integrity of the international financial system and our own domestic economy. Financial crime undermines businesses, the entire society, and the relationship of trust between individuals and institutions.
Second, we will work bilaterally with national partners as well as with and via multilateral agencies to broaden our global engagement programme. Since financial crime is a rapidly changing and really global phenomenon, it is only possible to defeat sophisticated cross-border networks by working together with international partners.
"With the proper policies and risk management, the Executive Office can support an efficient and linked AML/CFT system in the UAE through six strategic objectives that are in place until 2026. Additionally, this strategy will promote excellence and high standards inside the Executive Office. We have a specific plan for how we will achieve success as well as a clear mandate from the Higher Committee to oversee the National Strategy implementation.
