‘Dubai real estate is haven for money laundering’
Last year, the Nigerian Attorney-General of the Federation/Justice Minister Abubakar Malami and Economic and Financial Crimes Commission(EFCC) Chairman Ibrahim Magu were in Dubai,United Arab Emirates (UAE) launched investigations into alleged money laundering involving Dubai. It alleged that Nigerian politicians stashed looted funds in that country.
The report by the Washington-based Centre for Advanced Defence Studies (C4ADS), relying on leaked property data from the city-state, offers evidence to support the long-whispered rumors about Dubai’s real-estate boom.
It identifies some $100 million in suspicious purchases of apartments and villas across the city of skyscrapers in the United Arab Emirates, where foreign ownership fuels construction that now outpaces local demand.
The government-run Dubai Media Office said it could not comment on the report.
For its part, the center known by the acronym C4ADS said Dubai has a “high-end luxury real estate market and lax regulatory environment prizing secrecy and anonymity above all else.”
That comes as the U.S. already warns that Dubai’s economic free zones and trade in gold and diamonds poses a risk.
“The permissive nature of this environment has global security implications far beyond the sands of the UAE,” the centre said in its report.
“In an interconnected global economy with low barriers impeding the movement of funds, a single point of weakness in the regulatory system can empower and enable a range of global illicit actors.”
Unlike in the U.S., where property records are public, Dubai does not offer an accessible database of all its transactions, instead requiring specific details only individual buyers and sellers would have. C4ADS said it relied in part on “private UAE data compiled by real estate and property professionals” offered by a confidential source for its reporting.
The U.S. State Department as recently as this year issued a warning about money laundering in the UAE in its annual International Narcotics Control Strategy Report, noting the country’s money-exchange shops can allow for “bulk cash smuggling.” The UAE’s economic free zones, real estate sector and its trade in gold and diamonds also pose risks.
“The UAE has demonstrated both a willingness and capability to take action against illicit financial actors if those actors pose a direct national security threat or present a reputational risk to the UAE’s role as the leading regional financial hub,” the State Department said.
“However, the UAE needs to continue increasing the resources devoted to investigating, prosecuting and disrupting money laundering.”
According to Associated Press (AP), the properties in question include million-dollar villas on the fronds of the man-made Palm Jumeirah archipelago to an apartment in the Burj Khalifa, the world’s tallest building.
Others appear to be one-bedroom apartments in more-affordable neighborhoods in Dubai, the UAE’s biggest city.
Among the highest-profile individuals named in the report is Rami Makhlouf, a cousin of embattled Syrian President Bashar Assad and one of that country’s wealthiest businessmen.
The U.S. has sanctioned Makhlouf, who owns the largest mobile phone carrier Syriatel, for using “intimidation and his close ties to the Assad regime to obtain improper financial advantages at the expense of ordinary Syrians.”
Makhlouf and his brother, also sanctioned by the U.S., own real estate on the Palm Jumeirah, according to the report. They also have ties to two UAE-based free-zone companies.
The UAE, a federation of seven sheikhdoms led from oil-rich Abu Dhabi, has opposed Assad in his country’s yearslong war.
The UAE also opposes Hezbollah, the Lebanese political party and militia group backed by Iran.
However, C4ADS’ report identified at least one property directly linked to Lebanese businessmen Kamel and Issam Amhaz, who the U.S. sanctioned in 2014 for helping Hezbollah “covertly purchase sophisticated electronics” for military drones.
The report identified another nearly $70 million in Dubai properties owned by two other shareholders in Amhaz’s sanctioned firms.
Separately, the report identified some $21 million in real estate still held by individuals associated with the Altaf Khanani money laundering organization, a Pakistani ring that aided drug traffickers and Islamic extremists like al-Qaida through its currency exchange houses.
Dubai, an Arabian Peninsula entrepot, long has been a favourite port of call for those skirting the law.
Over time, however, Dubai itself became a haven. The emirate’s decision in 2002 to allow foreign ownership of so-called “freehold” properties drew a rapid construction boom that attracted developers from across the world, including President Donald Trump, whose name is on two golf course projects and villas.
Dubai’s easily flipped luxury properties offered an opportunity for those wanting to park money they otherwise couldn’t spend. The Federation of American Scientists warned based on news reports in 2002 that “money-laundering activity in the UAE may total $1 billion annually.”
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