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Dubai–A Den Of Corruption — Transparency International

Transparency International (TI), in conjunction with Organized Crime and Corruption Reporting Project (OCCRP) and the Centre for Advanced Studies (C4ADS),  has published damning report showing that Dubai  might be nothing but a den of corruption after all.

[C4ADS is nonprofit organization dedicated to data-driven analysis and evidence-based reporting of conflict and security issues worldwide.]

Dubai, the largest city in the United Arab Emirates (UAE), has reportedly become a favorable destination for slush funds due in part to its high-end real estate market and lax regulatory environment prizing secrecy and anonymity.

Known for its luxury hotels, skyscrapers, man-made islands, Dubai projects an image to the world of an ultra-modern, extravagant and luxurious utopia.

However, behind the sparkling façade lies one of the most secretive – and cash-friendly – money-laundering hubs in the world.

An investigation by OCCRP and C4ADS alleges that UAE secretive and weakly regulated financial sector and unaccountable high-end real estate market combine to offer a safe haven for money laundering and the corrupt.

According to the report, “leaked private real estate data reveals that organised crime figures, politicians and high net worth individuals are flocking to Dubai to purchase property, hide their wealth and avoid sanctions or taxes.

TI lamented that despite some improvements on paper in their anti-money laundering laws, Dubai seems to conduct little enforcement of these rules.

That, according to the anti-corruption agency, is a worrying sign that they don’t take their own regulations seriously.

Next year, it continues, “UAE will host a high-level meeting of signatories to the United Nations Convention against Corruption.”

It, therefore, call on UAE “to strengthen the enforcement of its property and financial sectors and crack down on existing abuse in both areas.”

While an estimated $2.1 trillion is generated in illicit capital per year, less than 1% is seized. Of this, 30% of all criminal proceeds seized have historically been real estate.

In this mean report, C4ADS identified 44 properties worth approximately $28.2 million held directly by sanctioned individuals.

It also uncovered an additional 37 properties worth approximately $78.8 million within these individuals’ expanded networks.

Illicit actors, whether narcotics traffickers, nuclear proliferators, conflict financiers, kleptocrats, large-scale money launderers, or terrorists, all exploit the lax system.

They move the proceeds of their criminal endeavors from the illicit marketplace into the licit financial system in order to use them effectively.

Luxury real estate has become a significant pathway for this conversion, facilitated by imperfect information regarding ownership and the details behind these substantial financial transactions.

This vulnerability affects major real estate markets around the world, including, but not limited to, London, Toronto, Hong Kong, New York, Singapore, Doha, Sydney, and Paris.

In nearly every case, it was discovered that:

  • Properties associated with these individuals are directly connected to information within their sanctions designations.

A total of 44 properties associated with the primary sanctioned subjects across the seven profiles, of which 42 were previously unidentified were identified.

  • Expansive unsanctioned corporate networks, often with direct ties to the individual’s Dubai properties.

These networks extend to jurisdictions as wide ranging as Syria, Romania, Mexico, Cyprus, Lebanon, Hong Kong, the United States, Liberia, and the British Virgin Islands, to name but a few.

  • Extensive use of family and third-party networks like lawyers, business partners, and nominees to obscure beneficial ownership of both sanctioned and unsanctioned commercial entities.
  • Ongoing activities for which the individuals and networks were originally sanctioned, activities that are, in some cases, more prolific than they were prior to the sanctions.

Read the full report here.

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