US Deputy Secretary of the Treasury Wally Adeyemo praised the “very strong framework” of the UAE’s financial institutions in fighting financial crime during a trip to the emirates on Tuesday.
Mr Adeyemo is visiting the UAE and Turkey to discuss ways to combat illegal cash flows around the globe.
“My conversations with the UAE have been productive,” he said in an exclusive interview with The National at the US consulate in Dubai.
The two countries have been collaborating “for decades” on tackling illicit financial flow, the official said.
He referred to this month's arrest in Dubai of the Indian-born Gupta brothers, Atul and Rajesh, over alleged financial crimes, including suspected looting of billions from state-owned companies in South Africa.
”We’ve seen the actions that they [the UAE] have taken including the arresting of the Gupta brothers, and other steps that they’ve taken in collaboration with us,” Mr Adeyemo said.
He highlighted the importance of cutting off illegal movement of funds, particularly during Russia's invasion of Ukraine.
“Russian elites and oligarchs often set up front companies or proxies that allow them to move money illicitly,” Mr Adeyemo said.
In his meetings with Emirati officials, he said he had discussed the importance of taking action against people ”who have been sanctioned in the context of Russia’s invasion of Ukraine" to prevent them from being "able to use the UAE’s finance sector”.
He praised the "robust action" taken by the UAE’s financial institutions in tackling the issue.
“The UAE is a global financial centre, lots of people want to move money through here,” Mr Adeyemo said. The UAE, he said, was "committed to taking the same steps” as the US on preventing people from using their systems to move money illegally.
The US Treasury last week said it had imposed sanctions on a “network of Iranian petrochemical producers” and “front companies” in China and the UAE.
“Front companies and proxies [were being used] to gain access to hard currency for Iran,” Mr Adeyemo said.
“We are going to take steps to make sure Iran can’t evade the sanctions that the US and its partners have put into place.”
“We have always provided some mobility for Iran to gain access to funds for humanitarian purposes,” he said.
The Treasury says the US is pursuing a path of “meaningful diplomacy” with Iran to revive the 2015 nuclear deal, from which the US withdrew under Donald Trump in 2018.
It said last week that, without a deal, the department would continue to use sanctions to limit exports of petroleum and petrochemical products from Iran.
“While we want the regime to change its behaviour and stop a nuclear programme, we want to make sure the Iranian people have humanitarian access,” Mr Adeyemo told The National.
Challenges posed by cryptocurrency
He said criminals would look for “any way” to illicitly use the financial system to move assets, including cryptocurrency.
“The challenge you face is that crypto is a global phenomenon,” he said. "Unless we have a rule set that is robust and global, we’re not going to be able to prevent bad actors from abusing these systems.
“Our shared goal is to allow financial innovation, while making sure we have a regulatory architecture that prevents illicit financing.”
He said the US had not seen a “large flow of cryptocurrency from Russia”.
