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UAE steps up drive against money laundering

Vimala Vasan

ABU DHABI, Oct. 11

THE UAE authorities have over the past week initiated measures that demonstrate a tough stand against money laundering. They have capped stiff central bank directives to money changers on fund transfers issued a few days back with the official announceme nt on Tuesday of the UAE Cabinet's approval of the anti-money laundering law.

Financial institutions and the business community here have welcomed the measures. The law on money laundering has been hailed as a major initiative that will increase international confidence in the UAE's business environment, while the central bank's r ecent directives to all money changers in the country to record details of persons or institutions transferring funds equivalent to or above Dh 2,000 (approx Rs 24,000), has been welcomed by exchange house officials as a step in the right direction.

Mr Terence Allen, Head of Treasury and Investment Banking, National Bank of Abu Dhabi, told Business Line that the law had been in the offing for some time and he was very happy that it will be in place soon. ``It has essentially put a rubber stamp on me asures being taken by banks here for sometime now. The central bank has been doing an enormous amount of work in this connection.It is the responsibility of banks to ensure its implementation,'' he said.

The law will help remove any shadow of doubt that could have in the past raised concerns, he said. He was of the view that other Gulf States will also act fast to put anti-money laundering regulations in place.

Mr Arif Shaikh, Country Risk Manager, First Gulf Bank, said the law will help banks to further implement guidelines already issued by the Central Bank. ``It is good for the economy, particularly as the whole world is moving towards implementing strong an ti-money laundering procedures,'' he said.

According to Mr Gary Wehbe, a long-term resident and businessman in Abu Dhabi, the law will bring about more awareness and ensure that people and institutions are more careful. However, since money laundering is a cross-border crime, there is a real need to monitor and come down heavily on offshore centres that are believed to be involved in laundering money, particularly in relation to narcotics, he said.

Giving details of the anti-money laundering law, which is expected to become operational soon, the official Emirates News Agency, WAM, noted: ``Implementation of the law will assist in the carrying out of the current international campaign against the fi nancing of terrorism. The law defines money-laundering as any act involving transfer, conversion of deposit of property, or concealment or disguise of their true nature, knowing that such property is derived from any of the stated offences which include trade in narcotics, kidnapping, piracy or terrorism and offences in breach of international conventions to which the UAE is a signatory, the agency stated.

Meanwhile, regarding the recent central bank directives to money changers, exchange officials here said that the new measures would help to ensure proper identification of persons transferring funds and also put exchange houses in a better position if ve rification is sought at a later stage.

Sudhir Shetty, General Manager, UAE Exchange Centre, said that there had earlier been limited proof of the bonafides of people involved in transactions. "This is a good move, though it may involve some extra paper work in the initial stages," he said.

V. Ramamurthy, General Manager, Emirates India International Exchange, said that the decision was a positive one and sent out the right signals to the international business community. "We already collect a lot of information about people transferring fu nds and this will ensure more detailed identification," he said. Some exchange house officials however noted that since over 80 per cent of the transactions involved amounts of more than Dh 2,000, there would be more work involved. They had made a repres entation to the authorities at a meeting yesterday to increase the current low minimum amount, but the Central Bank has decided to retain the current limit for sometime, the officials added.