x Abu Dhabi, UAEMonday 24 July 2017

UAE is key force in stopping money laundering, British security chief says

UAE has progressed significantly since 2001 but further efforts can help "exorcise the cancer of violent terrorism".

ABU DHABI // The UAE has a crucial role to play in blocking the flow of funding to terrorist groups, Britain's security minister said on a visit to the UAE. Admiral Lord West said that as a financial centre, the country was in a unique position to help "exorcise the cancer of violent extremist terrorism" by preventing money laundering.

He also underscored the strong bond between Britain and the UAE, noting the UK had no greater friend in the Gulf region. Lord West spoke on Sunday at the start of a two-day visit to the Emirates, during which he met Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. The minister later visited the headquarters of Dubai Customs, where he discussed ways of improving the exchange of intelligence between British and Emirati law enforcement agencies.

"It is in the interests of all countries in the world to exorcise the cancer of violent extremist terrorism," he said. "This is a focal point of travel in the region. A lot of people come through this region. It is a finance centre; a financial hub. "Everyone needs money, even terrorists. So if you can cut off the lucre to the extremists and terrorists that's going to get them where it hurts." The UAE has implemented a number of measures in recent years to block money laundering, including a requirement for anyone sending more than Dh2,000 abroad to register their personal details.

"The UAE is in an early stage of the cycle - their position now in dealing with this is about where the UK was in 1994," said Nigel Morris-Cotterill, the head of the Anti Money Laundering Network, a body that advises companies and governments around the world. "I know a lot of the people involved in this in the Gulf, and I know how hard they are working and how stringent they are making their procedures.

"Compared to the US, they are way ahead; the Gulf is now in a comparable position to Japan, but this region has only been working on it for a few years. "Obviously there are things that could be improved, but the UAE and other Gulf countries are progressing at a much faster rate in terms of legislation than Europe did. The hawala system of money transfer has also faced tougher regulation in the UAE in recent years.

After the September 11 attacks, the system was identified as a major source of terrorist funding. Since 2002, it has been more tightly controlled in the UAE, with the Central Bank registering the details of more than 260 hawala operators. In May this year, the UK Border Agency ran training courses for Abu Dhabi Customs officers on combating money laundering and gathering intelligence. British police have also been helping to train their UAE counterparts.

Other countries, including China, the US and Germany, have also sent officials and signed agreements to improve co-operation on security. Lord West said the UAE's position as a financial centre meant it was well placed to monitor the flow of illegal cash and share information with other countries. "The UAE is one of our closest and oldest friends in the region. I don't think we have anyone in the Gulf who is a closer friend.

"Clearly we have an interest in the stability of the region. "You cannot simply arrest and prosecute your way out of this situation; it require a more comprehensive approach in which you counter the radicalisation of people." He outlined the British government's anti-terrorism strategy, known as Contest 2. It covers four main areas: pursuing suspects, protecting citizens, preparing emergency response and preventing radicalisation of extremists.

Asked about Mr Obama's Cairo speech, Lord West applauded its less aggressive tone. "It seemed like an effort to reach out. It is important he delivers." He noted that the Israeli-Palestinian conflict remained a source of radicalisation of Muslims. "We really need to move forward on the issue," he said. "The Americans have the most influence on Israel and that speech is important in that context."

Lord West also criticised Mr Bush's use of the phrase "war on terror", saying inaccurate use of language left room for crucial misunderstanding. "I think the initial response was hardline," he said, adding that Mr Obama's election put efforts to combat extremism "in a better place". "The idle use of language is a very dangerous thing," he said. There was a danger, he added, that the Bush message could have been misinterpreted as targeting the Muslim faith as a whole.

It was important to identify the "few people who have a warped view of the Quran", he said. "In the UK we have a very big Muslim community and 99.9 per cent are really good people with whom we have shared values." Last year the Middle East and North Africa Financial Action Task Force, an independent inter-governmental body whose remit is to tackle money laundering and the financing of terrorism, said the UAE's recent laws on the subject appeared "comprehensive and workable".

It praised efforts to regulate hawala, the Islamic-based informal money transfer network. However, it said, the absence of statistics "made the effectiveness of measures difficult or impossible to gauge". The report said the laws governing free zones varied considerably. It added that although there was a mechanism for banks to report suspicious transactions, it produced far fewer reports than expected for a financial market of this size.

The report also said it was still far too easy for individuals to bring large amounts of cash into the country. Western security sources have told The National that they knew of numerous cases where people had entered the UAE with "millions of dollars" in different currencies in a suitcase without encountering problems. Dr Theodore Karasik, the director of research and development for the Dubai-based Institute for Near East and Gulf Military Analysis, an independent research company, agreed that while there was still work to be done, the UAE had made a huge effort to tighten regulations in a short time.

"The criminals are always looking for ways around the system," he said. "It is a constant race between them and the law to see who can outwit whom." chamilton@thenational.ae gmcclenaghan@thenational.ae