Dubai blacklists of the EU – E24
The European Commission is punishing the United Arab Emirates and Dubai for a lack of action against money laundering and terrorist financing following a series of revelations and demands for handling in the European Parliament.
The European Commission this week put the United Arab Emirates (FAE) and Dubai on the EU’s “blacklist” of countries with a high risk of money laundering and terrorist financing. The decision can have major consequences for both private individuals and companies that reside in or trade with the emirate.
– Great negative meaning
– The EU’s decision to put the Emirates on the list of high-risk countries will also be incorporated into Norwegian law and money laundering regulations So that Norway and the banks will also provide a very restrictive line – with thorough monitoring and control of transactions connected to the Emirates, Professor Jon Petter Rui at the Faculty of Law at the University of Bergen tells E24.
– In practice, this makes it difficult to have a business relationship with these states and the decision will have a major negative impact on the Emirates.
Disclosures in 20 countries
The decision was taken after several months of press from members of the European Parliament and civil society organizations, as well as revelations in E24 and over 20 European media that European criminals, wanted persons, Russian oligarchs and politicians subject to international sanctions have invested heavily in Dubai’s real estate market .
The revelations, known as «Dubai Uncovered», led in May 2022 to politicians from the four largest party groups in the EU Parliament demanding blacklisting of the Emirates.
– Required
I am a statement to E24 on financial advice by the EU commissioner for services and stability, Mairead McGuinness, the importance of protecting Europe.
– It is necessary to continue to identify and list high-risk third country jurisdictions that have strategic deficiencies in their anti-money laundering and terrorist financing frameworks, says McGuinness.
There are now 25 countries on the list. One of the requirements from the European Commission is that the Emirates must “identify and fight the circumvention of sanctions” – also among private actors.
– This will help the affected countries and ensure that the EU’s financial system and our internal market work, McGuinness.
The EU’s decision is also referred to in Political under the title «Blacklist for dirty money».
In March, the Emirates was “greylisted” by the Financial Action Task Force, an international body for combating money laundering and terrorist financing, due to a lack of measures to stop illegal money flows. Lyt is the starting point for the EU’s list, but they are not overlapping.
– Free haven for crimes committed in Norway
E24 has identified over 260 people of Norwegian background who are registered with over 380 properties in Dubai in a leak from the emirate’s property register in 2020.
E24 revealed in harvest that 17 people who have been punished, convicted, indicted or wanted for serious crime in Norway, are registered with nearly 50 properties with an estimated value of over DKK 180 million in Dubai.
– I get upset that the Emirates is a type of free port for crime committed in Norway. And for criminal financial gain, said Minister of Justice Emilie Enger Mehl (Sp) to E24 In November.
Most of the cases E24 uncovered concern serious crime that has yielded or may yield a large profit: Fraud, extensive theft, gross theft, tax evasion, VAT evasion, drugs and money laundering.
The majority have declared low – or no – taxable income or wealth to Norwegian authorities for a number of years.
Few owners follow the law
It is completely legal for Norwegians to own property in Dubai. But E24’s investigations also show that fewer than one in five of the Norwegian taxpayers in the list of owners declared property in Dubai in the tax return to the Norwegian authorities in line with the law. Similar findings were made in Denmark.
– The descriptions E24 has given in various postings show that it is a challenge for people who commit crimes in Norway, or get large exchanges of illegal business, to have such a type of free port. I’m busy doing everything I can to make it through, said Mehl.
– Might want to close
– When FAE ends up on the blacklist, it becomes difficult and impractical to deal with companies in the Emirates and with Dubai. All the banks will be watching closely and will be very strict when it comes to money transfers to and from the Emirates, says Roland Papp, policy officer for illegal money flows at Transparency International, to E24.
The organization works for transparency about cash flows. He believes it will have consequences both for the Emirates and the business world.
– Some companies may want to give up and close offices in FAE.
The work is based on an extensive coverage of data on over 800,000 properties in Dubai. For the first time, it provides an overview of who is the owner of, among other things, luxury villas, apartments, office buildings and business premises in Dubai.
E24 is leading the international collaboration with over 20 media organizations on the leaked data, which was shared by the American research foundation Center for Advanced Defense Studies (C4ADS).
A research group that has worked with the data estimates that the lender is sitting on property worth over NOK 1,380 billion in Dubai.
In comparison, the Norwegian state budget is just under 1,600 billion kroner.
1 of 4Photo: Michel CHRISTEN
On the run
In the lists of registered owners in Dubai, E24 found several people wanted for serious crimes. One of them is the Irishman Daniel Joseph Kinahan (44), who was accused of leading an international crime syndicate linked to drug trafficking, arms trafficking and a number of murders by Irish, Amyarkan and Spanish authorities.
He has denied all charges.
E24 revealed how Kinahan was allowed to buy property despite it being internationally known that he was under investigation for large-scale drug trafficking. He has not been extradited and must continue to reside in the Emirates.
Read on E24+
The wanted Dubai luxury of the «mafia» family
In several other cases as well, European politicians have completed indictments, but are unable to get the persons in question out of Dubai to bring them to trial.
Among them are persons suspected of defrauding European tax authorities of an estimated DKK 550 billion through trading in securities. The scam, known as “Cum Ex”is being investigated in Germany, Denmark and Belgium, among others.
Russian owners
Among the owners, the media identifies more than 100 members of Russia’s political elite, public officials and oligarchs. Several have international sanctions against them, including for their role in the occupation of Ukrainian territories.
Among the owners who were uncovered is Ruslan Baisarov (54), industrial magnate and one of Russia’s richest people. The market value of the five apartments and a villa on Palmen in the leak from 2020 is estimated at over DKK 80 million.
The more than 5,000 listed Russian owners controlled property with an estimated value of around DKK 30 billion in 2020.
The United Arab Emirates (UAE) has not imposed sanctions against Russia and has repeatedly refrained from criticizing the war and possible Russian war crimes in Ukraine.
Closed tax haven
The Emirates, and especially Dubai, have become notorious for large illegal money flows, and for being a haven for criminals and others who want to hide from their own authorities.
The Tax Justice Network (TJN), an international organization that works for a more even distribution of taxes, ranks Dubai among the most closed tax havens in the world.
Other countries recently added to the EU’s money laundering list are Congo, Mozambique and Tanzania. From before, North Korea, Iran and the tax haven Cayman Islands are also listed.
DNB: – Follows closely
Director of anti-money laundering work at DNB, Hege Hagen, says the following to E24:
– This is a situation we are following closely, and we will of course comply with any orders that come from the authorities. DNB has a contractual obligation, so this does not mean that we say no to or throw out a customer just because it is linked to these countries. But we can confirm that we follow up both transactions and connections to high-risk countries extra, and this also places greater demands on our customers. We already have good routines for this type of customer relationship from other countries, so this will not be a new problem for us.
During the coming month, the European Parliament and the European Council can protest against the decision and start a new process.
The United Arab Emirates (FAE) responds as follows to an inquiry from E24 about reaching ports on the high-risk list of money laundering, via its embassy in Oslo:
– The FAE takes its role in protecting the integrity of the global financial system extremely seriously. Through continued interagency coordination across FAE, as well as cooperation with national and international counterparts in the public and private sector, FAE has since March 2022 taken decisive action to solve this important problem. The FAE remains committed to expanding its platforms for proactive cooperation to combat financial crime as a top national and international priority.