x Abu Dhabi, UAEFriday 28 July 2017

US official to focus on illicit finance and sanctions in UAE talks

David Cohen, the US undersecretary for terrorism and financial intelligence, arrives in the UAE this week to press for greater coordination of sanctions to combat illicit finance.

David Cohen, the US undersecretary for terrorism and financial intelligence, arrives in the UAE this week to press for greater coordination of sanctions to combat illicit finance.

Mr Cohen will travel to Dubai and Abu Dhabi and meet senior government officials, the US Treasury department said in a statement.

The talks will centre on "issues related to illicit finance including the implementation of international economic sanctions against Iran and Syria" and combating terrorist financing worldwide, said the statement.

"These discussions will continue the ongoing cooperation and consultation between the US and the UAE on combating the financing of terrorism worldwide as well as the need to be increasingly vigilant to attempts by Iran to evade sanctions," it added.

Last year, the United States and European Union said they would place sanctions on any firms found to be dealing with the Iranian central bank or its commercial lenders, in response to the continuing dispute over Iran's nuclear programme. The US, and its allies, accuses Tehran of working towards acquiring atomic weapons under the guise of its civilian nuclear programme, a charge Iran vehemently denies.

Iran refuses to halt uranium enrichment, the most controversial aspect of its nuclear drive, saying it is purely for civilian purposes.

Tehran has been slapped by multiple sets of UN sanctions for its refusal to stop enrichment. The US and the EU have also imposed additional sanctions aimed at deterring Tehran from acquiring nuclear arms.

Iran is the UAE's third-biggest export partner and two of its banks, Bank Melli Iran and Bank Saderat Iran, operate local branches and participate in the UAE's clearing system. The UAE's proximity to Iran and the size of the Emirates' financial services sector has resulted in extra scrutiny from the US government over local financial institution operations.

In the meantime, US authorities have taken a firm line against financial services companies' ties to Iran during the past year, pursuing both HSBC and Standard Chartered for alleged violations of sanctions.

HSBC paid US$1.9 billion (Dh6.98bn) in penalties after a critical Senate investigation found its money-laundering controls had failed to prevent prohibited dealings with Iran, Mexican drug cartels and alleged terrorist financiers. The bank has admitted full responsibility and made a full public apology.

Standard Chartered reached a $667 million settlement with various arms of US federal and state authorities. Both institutions' operations in Dubai were subject to scrutiny over their failure to adhere to the sanctions against Iran.

ghunter@thenational.ae

* with agencies