On 2 November 2020, Italian Member of the European Parliament (MEP) Fulvio Martusciello of the Group of the European People’s Party (Christian Democrats) posed a written parliamentary question to the European Commission:
“In 2019, the Council removed the United Arab Emirates (UAE) from the EU’s list of non-cooperative jurisdictions for tax purposes.
The UAE is a regional trade hub and Dubai is a global financial centre. In 2018, Europe accounted for 19 % of Dubai’s non-oil trade. EU-UAE relations are getting closer, which brings an even higher risk of trade-based money laundering.
In July 2020, the Carnegie Endowment for International Peace published its report ‘Dubai’s Role in Facilitating Corruption and Global Illicit Financial Flows’. It mentions European money launderers, which operate through or from Dubai, as a major area of concern. It also underlines the lack of interest of both Emirati leaders and the international community towards the administrative loopholes and weak enforcement practices that make Dubai a globally attractive destination for dirty money.
1. Is the Commission aware of the content, facts, and risks presented in the Carnegie Endowment’s Report on Dubai?
2. Is it considering a special approach for its anti-money laundering (AML) policies towards the UAE, considering the obvious higher risks?
3. If the UAE’s AML and countering the financing of terrorism system continues to prove to be inefficient, is the it reconsidering updating its list of high-risk third countries with regard to AML standards, by including the UAE on this list?”
On 28 January 2021, Financial services, financial stability and Capital Markets Union Commissioner Mairead McGuinness responded on behalf of the European Commission stating: “The European Commission took good note of the Carnegie Endowment for International Peace’s report ‘Dubai’s Role in Facilitating Corruption and Global Illicit Financial Flows’ and its contents.
The European Commission is closely monitoring developments in the United Arab Emirates (UAE) regarding the fight against money laundering and terrorism financing, within the Financial Action Task Force (FATF) process.
The FATF released in April 2020 the mutual evaluation report (MER) on the UAE, which demonstrated several shortcomings in that country’s anti-money laundering and terrorism financing framework.
On the basis of this report, the UAE was referred to the listing process of the FATF International Cooperation Review Group (ICRG) in June 2020, entering into a one-year observation period before FATF assesses its progress in view of a possible listing.
If, at the end of the FATF observation period, the FATF considers that the UAE has not demonstrated sufficient progress and adopts an action plan to remedy the remaining unaddressed deficiencies, the European Commission would also add the UAE to the ‘EU Anti-Money laundering/Combating the Financing of Terrorism (AML/CFT) list’, following its revised methodology (SWD (2020)99) for identifying third countries with strategic deficiencies in their AML/CFT regimes.
The European Commission has already engaged with the UAE authorities to inform them about its methodology for assessing third countries, and the Commission’s legal obligation to identify high-risk third countries under Article 9 of the directive 2018/815.”
Photo Credit : https://pixabay.com/illustrations/money-laundering-money-euro-laundry-1952737/