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Tue 21 Mar 2017 01:37 PM

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UAE named in $20bn Russian money laundering scheme

Gulf country is one of 96 that allegedly handled dirty money between 2011 and 2014

UAE named in $20bn Russian money laundering scheme

The UAE allegedly received more than $434 million from a vast Russian money laundering scheme between 2011 and 2014.

The country has been named in a Moldovan media investigation this week alleging that some of the world’s biggest banks failed to spot an estimated 70,000 of dirty transactions in the ‘Global Laundromat’ operation first exposed in 2014.

According to the investigation, the UAE is one of 96 countries that unwittingly handled a total of $20.8 billion laundered in a complex operation run by Russian criminals with links to the Russian government.

The UAE was said to have received a total of $434,076,385.

Eleven UAE-registered companies are named in the investigation as “shell” companies through whose accounts some of the money was filtered.

And Emirates NBD was ranked 10th in a list of the 15 bank families that received the largest amounts of tainted money from the scheme. The bank allegedly handled $357,130,391.

There is no suggestion either in this article or the investigation that Emirates NBD facilitated criminal activity or was even aware of where the funds had originated from. Emirates NBD has been contacted for a statement.

Arabian Business has also approached national representative body the UAE Banks Federation for comment on the anti-money laundering policies in place in the UAE.

The investigation was undertaken by the Moldovan-based Organized Crime and Corruption Reporting Project (OCCRP), which broke the story of the Laundromat in 2014. Law enforcement agencies in Moldova and Latvia have since tracked down more than $20 billion in dirty money and in 2016 arrested the alleged architect of the scheme, a Moldovan businessman with Russian citizenship.

He has been extradited to Moldova to face fraud and money-laundering charges but has dismissed the accusations as “drivel”, according to media reports at the time.

Since 2014, the OCCRP has worked with reporters from local newspaper Novaya Gazette to obtain Moscow bank records that allegedly reveal for the first time an intricate picture of how billions of dollars moved from Russia into 112 banks accounts in eastern Europe, and then into banks around the world.

The OCCRP has published the full investigation on its website and shared the data with investigative reporters in 32 countries. 

The Global Laundromat has been described as “ingenious” by money laundering experts. Between autumn 2010 and spring 2014, Russian officials and insiders moved money into Europe, the US and other countries via payments to a network of 21 shell companies in the UK, Cyprus and New Zealand, according to the investigation.

Further payments went to a wider shell of companies and into 96 countries, passing into and through some of the world’s biggest banks – including Bank of China, Barclays, HSBC, Deutsche Bank and Coutts & Co.

Many of the shell companies were fictitious, the investigation claims, while in other cases their owners remain secret, often due to the anonymity afforded by offshore corporation laws. 

The OCCRP said the companies it contacted denied wrongdoing or said they have now stopped servicing certain Russian clients. Others invoked confidentiality and refused to identify their clients.

The OCCRP added that Moldovan law enforcement agencies have claimed their efforts to investigate the scheme have been obstructed.

Earlier this month, the Moldovan Parliament lodged an official complaint alleging that the Russian government has “harassed” and “abused” Moldovan officials trying to enter Russia.

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