Dubai is the axis of global corruption and Illicit Financial Flows- GFI
Below is a summary from a hew report published by the Global Financial Integrity (GFI) showing Dubai’s Role in Facilitating Corruption and Global Illicit Financial Flows;
A TWENTY-FIRST-CENTURY CITY, Dubai is a global financial center, a shopper’s paradise, and an oasis for the world’s well-to-do. While the vast majority of financial, business, and real estate transactions in Dubai are not associated with illegal activity, part of what underpins Dubai’s prosperity is a steady stream of illicit proceeds borne from corruption and crime.
The wealth has helped to fuel the emirate’s booming real estate market; enrich its bankers, moneychangers, and business elites; and turn Dubai into a major gold trading hub. Meanwhile, both Emirati leaders and the international community continue to turn a blind eye to the problematic behaviors, administrative loopholes, and weak enforcement practices that make Dubai a globally attractive destination for dirty money.
As leaders in Washington and several other Western capitals reassess their strategies and relationships in the Gulf to reflect changing geopolitical realities, new economic imperatives, and growing divergences with regional partners on a range of policy issues, there is a fleeting opportunity to elevate and address widespread concerns about Dubai’s role in enabling global corruption and its many destabilizing effects. But doing so will require a fine understanding of why and how corruption has become such a central element of Dubai’s political economy.
It will also require anticorruption practitioners to recognize that traditional—and largely punitive—policy instruments will not succeed absent a more affirmative and sustained effort by Emirati leaders to ensure that Dubai’s economy remains competitive and attractive over the long term. Corrupt and criminal actors from around the world operate through or from Dubai.
MAJOR AREAS OF CONCERN
- Corrupt and criminal actors from around the world operate through or from Dubai. Afghan warlords, Russian mobsters, Nigerian kleptocrats, European money launderers, Iranian sanctions-busters, and East African gold smugglers, all find Dubai a conducive place to operate.
- Dubai’s property market is a magnet for tainted money. Built to attract foreign buyers, the emirate is dominated by towers of upscale flats and man-made islands studded with luxury villas. Property developers and real estate agents accept huge sums from politically exposed persons—individuals entrusted with a prominent public function, as well as their families and associates—and other suspicious buyers. Even individuals targeted by international sanctions use Dubai property to launder money due to weak regulations and lax enforcement.
- Now one of the world’s largest gold hubs, Dubai is also a place to launder artisanally mined gold, especially from conflict-prone parts of East and Central Africa. Opaque business practices and regulatory loopholes allow this laundered gold to enter world markets on a massive scale.
• With approximately thirty free trade zones, Dubai is a haven for trade-based money laundering. Operating with minimal regulatory oversight or customs enforcement, these zones allow businesses to disguise the proceeds of crime via the over- and under invoicing of goods, multiple invoicing, and falsifying of other trade documentation. Many migrant workers are also treated as commodities in Dubai through the kafala system, an exploitative.
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