Dubai on the spot for accelerating stream of stolen wealth

By Dan Masika & Anne Njenga

Dubai is just one of many enablers of global corruption, crime, and illicit financial flows, according to the latest study published on Wednesday.

Detailing how the United Arab Emirates (UAE) nation continues to be a global illicit financial destination despite being a shopper’s paradise, the study authored by Mathew Page and Jodi Vittori, reveals while the vast majority of financial, business, and real estate transactions in Dubai are not associated with illegal activity, part of what underpins the Arab nation’s prosperity is a steady stream of illicit proceeds borne from corruption and crime.

It further says that both Emirati leaders and the international community continue to turn a blind eye to the problematic behaviors, administrative loopholes, and weak enforcement practices that make Dubai a globally attractive destination for dirty money.

The scathing report also found that corrupt and criminal actors from around the world operate through or from Dubai. Afghan warlords, Russian mobsters, Nigerian kleptocrats, European money launderers, Iranian sanctions-busters, and East African gold smugglers, all find Dubai a conducive place to operate.

Dubai’s property market for instance, is seen as a magnet for tainted money – with the sector build to attract foreign buyers, the emirate is dominated by towers of upscale flats and man-made islands studded with luxury villas.

Property developers and real estate agents are said to accept huge sums from politically exposed persons—individuals entrusted with a prominent public function, as well as their families and associates—and other suspicious buyers.

Even individuals targeted by international sanctions use Dubai property to launder money due to weak regulations and lax enforcement.

Dubai is also a place to launder artisanally mined gold, especially from conflict-prone parts of East and Central Africa – while opaque business practices and regulatory loopholes have easily allowed laundered gold to enter world markets on a massive scale.

With approximately thirty free trade zones, Dubai is a haven for trade-based money laundering.

Operating with minimal regulatory oversight or customs enforcement, these zones allow businesses to disguise the proceeds of crime via the over- and under-invoicing of goods, multiple invoicing, and falsifying of other trade documentation.

Dubai now joins a long list of tax havens like Mauritius, Lichtenstein, Monaco, Panama, Bahamas, Belize, Bermuda, the British Virgin Islands, the Cayman Islands among others that are commonly used by tax cheats and corrupt politicians mainly from Africa to stash their looted money.

A Paris-based Financial Action Task Force (FATF) a global dirty-money watchdog, accused Dubai and the larger United Arab Emirates in April of not doing enough to prevent money laundering despite recent progress, and risks landing on an international watchlist.

“The United Arab Emirates recently strengthened its legal framework to fight money laundering and terrorist financing but, as a major global financial centre and trading hub, it must take urgent action to effectively stop the criminal financial flows that it attracts,” the FATF said in a statement.

The Tax Justice Network Africa (TJNA) hosted a virtual training for tax justice advocates in the continent, themed, Tax Justice Advocacy: Increasing Participation of Civil Society Organizations (CSOs) and Journalists through Capacity Building which brought together various disciplines and experts to deliberate on tax matters as well educate journalists on how best to report on illicit financial flows.

The ten days virtual training which attracted participants from 40 countries, sought to impart knowledge and discussed various strategies on how the continent can reap from its resources to finance its own development.

It is through such trainings that the institution is betting big on individuals from the civil society, media, trade unions, policy makers and academia to help address such tax challenges that continue to impact Africa.

“The success of the 7th ITJA proves that with technology, regular capacity building activities can be held. Since learning is a lifelong exercise, we shall continue holding more virtual trainings” said Alvin Mosioma, TJNA’s Executive Director during the virtual closing ceremony.