Dubai Revelations Prompt Questions From EU Parliamentarians

Published: 30 May 2024

dubai-viewDubai view (Photo: Ole Martin Wold)

By Katie Sawyer

European parliamentarians are questioning whether the United Arab Emirates should have been taken off the “gray list” of countries at risk of money laundering and terrorist financing, following revelations that Dubai property owners include a host of dubious characters like drug lords and sanctioned businessmen.

In mid-May, OCCRP and more than 70 international media outlets published the Dubai Unlocked investigation based on leaked real estate data. The stories showed that alleged criminals from around the globe flock to Dubai, where they benefit from low tax rates, financial opacity, and a luxurious metropolis.

The investigation came on the heels of the February decision by the Financial Action Task Force (FATF) –– a G7 anti-money laundering initiative –– to remove the UAE from its gray list.

That decision did not sit well with some Members of the European Parliament (MEPs), including Denmark's Kira Marie Peter-Hansen. She told OCCRP that the Dubai Unlocked project showed they were right to be concerned.

“We can now see that our criticism of FATF's decision to remove the UAE from the list of high-risk countries, in terms of economic crime including money laundering, was fully justified,” said Peter-Hansen, who is vice president of the European Green Party.

Markus Ferber, a German MEP with the European People's Party (EPP), echoed her concerns.

“The Dubai Unlocked investigation strongly suggests that this move has been premature,” he told OCCRP’s reporting partner E24. “The FATF would be well-advised to have a very close look if really all of the practices uncovered by the Dubai Unlocked investigation have been sufficiently addressed by the UAE.”

A FATF spokesperson said the organization’s decision to remove the UAE followed the implementation of reforms including measures against money laundering and terrorist financing.

“Do note that completing an action plan and being delisted does not mean a country’s system is flawless,” the FATF spokesperson said, stating the UAE will continue to be monitored by the independent regional body, the Middle East and North Africa Financial Action Task Force.

Following the FATF delisting, the European Commission proposed removing the UAE from its own list of high-risk countries.

But the European Parliament objected to the Commission’s proposal on April 23 in a formal resolution, citing concerns of sanction circumvention by Russians in Dubai among other issues.

“I am pleased that, at the last (European Parliament) meeting in April, my voice was used to oppose the removal of the UAE from the list of high-risk countries,” said Luděk Niedermayer, a Czech EPP member.

He cited the EU Tax Observatory’s recent finding that Russian investments in Dubai residential properties reached US$6.3 billion after the invasion of Ukraine as evidence of the UAE’s “inadequate or outright absent controls.”

“In the current circumstances, it seems to me to be perfectly justified for the UAE to remain on that list,” Niedermayer told OCCRP’s reporting partner

A European Commission spokesperson said the body is “currently reflecting about the possible next steps following the European Parliament’s objection and remains committed to comply with its obligation to update the EU list following the decisions from FATF.”

Peter-Hansen disagreed that the Commission was required to follow FATF’s directive, citing a March 14 resolution stating that the assessment is “an autonomous process which should be carried out in a comprehensive and unbiased manner.”

On April 24, the European Parliament adopted the last components of the 6th Directive of anti-money laundering and countering the financing of terrorism (AMLD6), a regulation that further pushes the EC to make autonomous conclusions from FATF.

Representatives from the UAE did not respond to a request for comment. However, an unnamed government official, reacting to the Dubai Unlocked project, told Khaleej Times the government “takes its role in protecting the integrity of the global financial system extremely seriously.”