A Guide to Anti-Money Laundering for Crypto Firms

New UK-UAE partnership to tackle terrorism financing

CFT Knowledge & Training

The UK has partnered with UAE in a fresh bid to target those financing terrorism and serious and organized crime.

The UK-UAE Partnership to Tackle Illicit Financial Flows, announced last week, is part of a new Partnership for the Future between the two countries to tackle shared global challenges.

The UK’s Home Secretary said: “This new agreement bolsters both our countries’ efforts in going after the terrorists and serious and organized crime gangs that seek to do us harm. The partnership will help to keep the public safe, protect our prosperity, and bring dangerous criminals to justice.”

UAE Minister of State Ahmed Ali Al Sayegh added: “We are committed to stamping out terrorist financing and serious and organized crime in all of its forms to protect the UAE and uphold the integrity of the international financial system.”

The partnership will enhance intelligence sharing and joint operations between the two countries against serious and organized crime networks, with a particular focus on countering money laundering in high-risk areas such as dealers of precious metals and stones, real estate, and emerging technologies such as cryptocurrencies.

Tackling AML/CFT in the UAE

The emphasis on terrorist financing is particularly relevant for the UAE, reflecting that many countries that are deemed high risk – such as Afghanistan, Libya, Palestinian territories, Syria, and Yemen – are close neighbors.

The partnership also reflects wider action by the UAE to improve its international cooperation, an area for improvement highlighted in its most recent FATF evaluation. Last month it announced an intelligence-sharing deal with China to bolster both countries’ fights against money laundering and terrorist financing.

While in February, the UAE’s central bank fined 11 banks a total of $12.m for AML failings, and in April issued new guidelines on AML and CFT measures aimed at raising awareness and improving compliance.

The UK’s developing stance on financial crime

It is notable that once again the UK is striking out alone, without the backing of the EU, in its fight against AML and CFT – as it did with recent Myanmar sanctions

As part of the 2020 Spending Review, the UK committed a further £63m to tackle economic crime and fraud, to reform the Suspicious Activity Reports system, and to grow the NECC, which coordinates law enforcement’s response to money laundering. 

In its Integrated Review of Security, Defence, Development and Foreign Policy, updated in July, the UK government said: “As soon as parliamentary time allows, we will introduce legislation that tackles economic crime, including the use of UK corporate structures in facilitating high-end money laundering. 

“This legislation will incorporate reform of Companies House registration and limited partnerships and introduce a register of overseas entities owning property in the UK. In addition to promoting action on corporate transparency and accelerating asset recovery through our G7 presidency, we will use our strong relationships with other major financial markets, such as the US, to maximize our collective impact.”

This new partnership with the UAE, referred to as the “first of its kind” in last week’s announcement, hints that similar collaboration with other countries may indeed be in the pipeline. 

For investigators, exposure to high-risk sectors highlighted by the new partnership – including dealers of precious metals and stones, real estate and cryptocurrencies – should be carefully evaluated. Compliance teams should also be mindful of greater trade finance risks due to increasing levels of trade between the UK and UAE as a result of the new partnership. Money laundering continues to be a risk, highlighted by a recent case in which  £50m in criminal profits was moved between the two countries. 

Originally published September 23, 2021, updated November 18, 2021

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