Gulf Region Attractive To Money Launderers, Warns Expert

by Lorys Charalambous, Tax-News.com, Cyprus

06 September 2001

According to one money-laundering expert, the Gulf region, which takes in the up-and-coming offshore financial centre in Dubai, has been a victim of its own success. Tim Parkman, a UK qualified solicitor who has been the money laundering reporting officer for the UK, Singapore, and the United Arab Emirates, warned recently that the very attributes which make the region attractive for genuine customers also attract money launderers to the area, and warned banks and other institutions in the Gulf to be on their guard.

'Money launderers look for confidence in the financial system they use in the same way that genuine customers do,' explained Mr Parkman. 'They want to know that their money is relatively safe and that their instructions will be followed. They also look for a depth of products, services and financial institutions to choose from (both local and foreign) in effecting their schemes apart from the latest technology'. Other factors pointed to by Mr Parkman as contributing to the region's attractiveness to criminals included the strong, freely convertible currencies, relative political stability, advantageous time zone location, and proximity to the states of the former Soviet Union.

The former head of compliance in the Gulf, Middle East and South Asia for Standard Chartered went on to warn that it is not just banks which need to be vigilent, but other, possibly non-financial institutions as well. Money changers and jewellers risk intial contact with criminally sourced funds, he explained, and businesses looking for investments could inadvertently collect laundered funds.

''I do not know of any reliable published figures and would not want to speculate on likely volumes in the region,' he admitted . 'But the point I want to make is that if it exists then it poses a threat to the integrity of the financial system and to the countries' reputation and international standing.' However, he praised the initiatives already taken by the United Arab Emirates to combat money-laundering activities, pointing to the wide-ranging provisions contained in the UAE Central Bank Circular published last November.

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