The UAE Ministry of Economy signed a series of Memoranda of Understanding (MoUs) with key national authorities, including the Economic Security Centre of Dubai (ESCD) and the Dubai Land Department (DLD), to strengthen efforts in combating money laundering and terrorism financing. This initiative, announced during the “Role of the Designated Non-Financial Businesses and Professions (DNFBPs) Sector in Combating Financial Crimes” summit in Dubai, aims to enhance the UAE’s regulatory framework, improve transparency, and align with international standards set by the Financial Action Task Force (FATF). The agreements mark a significant step in fostering institutional integration, data sharing, and capacity building to counter financial crimes effectively.
The MoUs are designed to bolster the UAE’s anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks by establishing clear mechanisms for cooperation. According to the Ministry of Economy, these agreements will enhance the regulatory infrastructure by improving oversight of the DNFBP sector, which includes real estate agents, lawyers, accountants, and other non-financial professions vulnerable to money laundering risks. The agreements facilitate secure data and information exchange, ensuring compliance with national legislation and international best practices. They also support the Ministry’s supervisory role under Federal Decree Law No. 20 of 2018 on Anti-Money Laundering and Combatting the Financing of Terrorism and Illegal Organisations.
Abdullah bin Touq Al Marri, Minister of Economy, emphasized the importance of these partnerships, stating, “These MoUs reflect our commitment to enhancing the integrity and transparency of our financial systems, aligning with global standards to combat financial crimes.” The agreements also aim to improve monitoring and compliance systems, ensuring that entities adhere to AML/CFT regulations, according to middle east economy.
The signing ceremony, held on the sidelines of the Dubai summit, was attended by prominent officials, including Abdullah bin Touq Al Marri, Minister of Economy; Abdullah bin Sultan bin Awad Al Nuaimi, Minister of Justice; and Ahmed Al Sayegh, Minister of State. The MoUs were signed by Abdullah Ahmed Al Saleh, Under-Secretary of the Ministry of Economy; Safeya Hashem Al Safi, Assistant Under-Secretary for the Commercial Control and Governance Sector; Faisal Yousef bin Selaitin, CEO of the Economic Security Centre of Dubai; and Majid Saqr Al Marri, CEO of the Real Estate Registration Sector at the Dubai Land Department.
These signatories represent a collaborative effort between federal and Dubai-based entities to address financial crime. The involvement of the ESCD and DLD highlights Dubai’s critical role as a global financial hub, where real estate and commercial transactions are particularly susceptible to illicit financial activities.
Objectives of the MoUs
The MoUs establish frameworks for technical cooperation, capacity building, and knowledge exchange. Key objectives include:
Enhanced Data Sharing: The agreements enable secure and confidential data-sharing mechanisms to improve the detection and prevention of financial crimes. This is particularly crucial for tracking illicit funds in sectors like real estate, which has historically been a target for money laundering.
Capacity Building: The MoUs promote training and technical assistance to strengthen the capabilities of regulatory bodies and private sector entities in identifying and reporting suspicious activities.
Alignment with FATF Standards: The UAE is committed to fully implementing FATF standards, and these agreements support efforts to exit the FATF “grey list,” where the UAE was placed in March 2022 due to deficiencies in AML/CFT measures. The MoUs are part of a broader strategy to demonstrate progress in addressing these concerns.
Institutional Integration: By fostering partnerships between the Ministry of Economy, ESCD, DLD, and other entities, the agreements aim to create a unified approach to combating financial crimes, reducing regulatory gaps.
Context and Challenges
The UAE’s efforts come amid heightened scrutiny of its financial systems. In 2022, the FATF placed the UAE on its grey list, citing deficiencies in combating money laundering and terrorism financing. While the designation has not significantly impacted business, it has posed reputational risks and potential challenges for long-term credit ratings. The UAE has since implemented significant reforms, including the establishment of the Executive Office of AML/CFT in 2021 and the passage of multiple laws to strengthen oversight.
However, challenges remain. A 2023 report by POLITICO highlighted concerns from some FATF officials that the UAE had not fully addressed money laundering risks, particularly in its diamond trade and real estate sectors. Critics, including European oversight officials, argued that geopolitical considerations, such as energy deals with Western nations, may have influenced efforts to expedite the UAE’s removal from the grey list. Despite these allegations, UAE officials have refuted claims of providing inaccurate data, asserting that their reforms are “factually accurate, tested, and true.”
Transparency International’s 2020 report further underscored Dubai’s role in global money laundering, citing its real estate market as a haven for illicit funds. High-profile scandals, such as the 1MDB case and Luanda Leaks, have linked the UAE to cross-border corruption, underscoring the need for robust AML measures.
Broader National Strategy
The MoUs align with the UAE’s 2024-27 National Strategy for AML/CFT/CPF, approved by the UAE Cabinet on September 2, 2024. This strategy focuses on 11 strategic goals, including improving risk understanding, enhancing international cooperation, and strengthening oversight of DNFBPs. The Ministry of Economy’s Anti-Money Laundering Department plays a pivotal role in implementing this strategy, conducting inspections and raising awareness to ensure compliance.
The UAE has also pursued international cooperation, signing 45 mutual legal assistance treaties, including one with the United States in 2022. These agreements facilitate cross-border investigations and intelligence sharing, critical for addressing global financial crime networks.
Impact and Future Outlook
The MoUs are expected to enhance the UAE’s reputation as a secure and transparent financial hub, attracting legitimate investment while deterring illicit activities. By strengthening oversight of the DNFBP sector and improving coordination with Dubai entities, the UAE aims to mitigate risks in high-value sectors like real estate and trade.
However, sustained efforts are needed to address international concerns and exit the FATF grey list. The UAE’s progress will likely be evaluated at upcoming FATF plenary meetings, with an onsite visit potentially signaling imminent removal from the list. Meanwhile, the Ministry of Economy’s partnerships with ESCD and DLD set a precedent for federal-local collaboration, which could serve as a model for other emirates.
The UAE Ministry of Economy’s MoUs with Dubai entities represent a proactive step in combating money laundering and terrorism financing. By fostering cooperation, enhancing transparency, and aligning with global standards, the UAE is reinforcing its position as a leader in financial integrity and economic competitiveness.
