There have already been 378 suspicious transaction reports flagged this year in the period to the end of last month.
There have already been 378 suspicious transaction reports flagged this year in the period to the end of last month.

Reports of suspicious deals up by half



Reports of suspicious financial deals in the UAE increased by more than half last year as banks and other companies became more alert of the need to battle money laundering.

Recent sanctions against Libya and other asset freezes in the region mean financial service companies are having to step up their scrutiny of fund flows.

"There's more awareness about anti-money laundering and STRs [suspicious transaction reports] and people are better able to identify forged documents," said Abdulrahim al Awadi, the executive director and head of the Central Bank's anti-money laundering and suspicious cases unit.

Mr al Awadi said it was too early to say what impact regional unrest would have on suspicious money flows into and out of the country.

Banks and other financial and non-financial institutions made 2,711 STRs last year, up 55 per cent from 1,750 in 2009. There have already been 378 STRs flagged in the period to the end of last month.

The Central Bank has embarked on a training programme for 1,000 staff from financial service providers, financial regulators, the judiciary and other government departments. Yesterday it was the turn of companies within the Dubai International Financial Centre (DIFC).

Focus on suspicious flows is intensifying after sanctions by the UN, EU and US against assets owned by the Libyan leader Muammar Qaddafi and his officials.

The UAE was complying with the sanctions and the anti-money laundering unit was monitoring financial companies to ensure they complied with the regulations, said Mr al Awadi.

"We are going to implement all the sanctions in line with the FATF [Financial Action Task Force]," he said.

A challenge for businesses is keeping track of the differences between the sanctions, say officials. Lists of names - individuals and companies - subject to asset freezes are regularly updated.

The US resolutions are also considered more stringent than the EU, which allows for some exemption for transactions involving Libyan government-related companies.

"It's not easy to deal with any sanctions as they can cut off potential business," said a risk officer from a DIFC-based financial advisory company, who asked not to be identified.

The company is seeking legal advice about whether it could still accept payment for work it completed for a Libyan government organisation before the sanctions came into force.

"Sanctions compliance is becoming a larger part of a compliance officer's role," said Bryan Stirewalt, the managing director of Dubai Financial Services Authority (DFSA), which ensures anti-money laundering compliance among the 320 companies operating in the DIFC.

Recent regional events had not yet had an impact on STRs as most DIFC companies were international firms without financial links with affected countries, Mr Stirewalt said.

"There's going to be a lot of money on the move and it could be good money and it could be bad," he said. "It's up to firms to do their proper diligence and have your customer controls to make sure they know the difference between good and bad."

Since 2005 the DFSA has logged 93 STRs, the vast majority of which have been in the past two years. A weak economy, encouraging more people to attempt criminal transactions and an increasing number of companies working within DIFC were behind the rise, Mr Stirewalt said.

"Most to all of them relate to a blocked transaction where someone has not been able to supply information that's necessary to identify a person or source of funds," he added.

Money laundering is criminalised under federal law. Under the 2002 legislation, companies are obliged to report suspicious cases to the anti-money laundering unit.

A 2004 law criminalises transactions linked to funding terrorism.

If you go
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How to get there: Emirates currently flies from Dubai to Orlando five times a week.
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