Anti-Financial Crime & Financial Crime Compliance
Regulatory Intelligence Leadership | Insight | Network

Analysis & Opinion, Financial Crime, Insight, UAE

INSIGHT: Calls for more transparency from Egmont Group of FIUs after it accepts ‘substantial donation’ from greylisted UAE

EGMONT GROUP: The international grouping of FIUs - national fincrime police and customs agencies - also held its annual gathering at a glittering venue in Abu Dhabi, UAE last year.

By ALISHA HOULIHAN for AML Intelligence

THE BODY representing the world’s Financial Intelligence Units (FIUs) needs to be more transparent about its funding, a former FIU chief has said.

It comes in the wake of the ‘Egmont Group of FIUs’ accepting an undisclosed “substantial donation” from the United Arab Emirates – a country on the Financial Action Task Force’s watchlist.

The donation has spooked many in the international Anti-Financial Crime community – particularly given the UAE’s reputation as a clearing house for Russian dirty money and a safe haven for criminal fugitives.

Last year the UAE hosted the Egmont Group’s annual conference at a glittering convention centre in Abu Dhabi.

After the announcement of the donation, Latvia’s former FIU chief Ilze Znotina said the Egmont Group must “ask itself some questions and implement modern corporate governance procedures, promoting transparent operations.

“For example, placing information about its budget and its utilization on its website,” she recommended.

“And if that were to happen, more transparent donations, alongside a more solidified international recognition, would likely ensue,” she observed.

Well known US AFC expert Jim Richards said following the UAE’s donation that “Egmont should publish its financials.”

He also questioned why the group only published two benefactors for its training programme on its website (see below).

In a statement this week the Egmont group said the UAE was being added to the funding currently provided by ECOFEL’s “other generous donors” – the US Department of State – Bureau of International Narcotics and Law Enforcement Affairs (INL), SECO Economic Cooperation and Development , Saudi Arabia FIU (SAFIU), AUSTRAC, UK Financial Intelligence Unit (UKFIU), Anti-Money Laundering Division (AMLD) – Taiwan, Grand Duchy of Luxembourg and past donors.

Erol Riza, the MD of Mithra Capital Advisors commented of the UAE money: “Such donations should not be accepted and it beggars belief this is advertised. Why is the donation amount not shown and why is it given?? Seriously this is a sad day!”

Publisher of this journal, AML Intelligence, Stephen Rae said the donation had to be seen in the context of the UAE’s reputation and inclusion on the FATF “grey list.” He said this would play on the minds of international police chiefs and other law enforcement leaders who have had serious difficulties having criminal fugitives extradited from the country. Some police chiefs would be seeking answers from their own national FIUs about what is going on in Egmont.

“Clearly too, the presence of international criminal fugitives avoiding extradition agreements thru living (quite openly) in UAE is a credible issue for many parent LEAs. (Law Enforcement Agencies),” he said. He added that the Egmont Group needed to explain this context.

“Overall, you’d have to question the timing too. Why do it now while UAE is still on the FATF watchlist; why not wait until UAE is off the greylist – as many expect it will be this summer?” he said.

For those who have been closely associated with Egmont, the donation brings into focus wider issues within the umbrella group.

Latvia’s highly regarded former FIU chief Ilze Znotina said that “two conflicting feelings arise. On one hand, of course, the image of Egmont Group of Financial Intelligence Units with this donation accepted from a state included in the greylist does not improve.

“Even if all conflict of interest risks have been assessed and, if possible, mitigated, I believe a more extensive commentary on this donation would be beneficial. Not only would it reduce reputational risks, but it would also explain why this donation is important for the Egmont Group, while also reminding people of its role and the need to combat financial crimes more broadly.”

EXPERT: Latvia’s highly regarded former FIU chief Ilze Znotina.

At the same time she said that “as a true advocate of FIUs and the underutilized potential of the Egmont Group, I want to tell all critics that this donation is smaller compared to previous donors, including Switzerland and especially, the UK.

“If I am not mistaken, and I apologize if I am wrong; these donations were also made when jurisdictions were thinking about their international AML/CFT image and the FATF process.

“But regarding the explanation provided by Egmont that the money is intended for training, I can only confirm that the work done by ECOFEL, the Egmont unit which prepares training materials and supports FIUs and their leaders is truly commendable. ECOFEL has fantastic team and I am delighted that this donation will allow them to continue their work.

“At the same time, two other questions bother me. One is more rhetorical and the other practical. The first, why don’t those who criticize Egmont ask why other countries – which loudly talk about the harmful nature of financial crimes and their ruthless approach to them in all policy documents – are so passive in allocating resources and acknowledging the role of those combatting financial crimes, especially FIUs, AROs, anti-corruption bodies, etc.?

The second area she said should be “the Egmont Group should also ask itself some questions and implement modern corporate governance procedures, promoting transparent operations. For example, placing information about its budget and its utilization on its website. Are really all 5 million necessary only for organizing training? And if that were to happen, more transparent donations, alongside a more solidified international recognition, would likely ensue,” she said.

The Egmont Group said the money would help one of its strategic objectives to strengthen FIU’s capabilities, and the Egmont Centre of FIU Excellence and Leadership (ECOFEL) Program plays a pivotal role in that matter through its training program and learning platform with 7,000 registered participants.

Elżbieta Franków-Jaśkiewicz, Interim Chair, Egmont Group of FIUs this week issued a statement welcoming the UAE money. “The Egmont Group sends its sincere gratitude to the United Arab Emirates Financial Intelligence Unit (UAEFIU) for their very substantial financial contribution to the ECOFEL program,” she said

“Their support is instrumental in helping the ECOFEL continue equipping FIU personnel with AML/CFT training knowledge and expertise. The UAEFIU’s funding demonstrates UAE authorities’ global support, commitment, and engagement to AML/CFT principles,” she added.

Ali Faisal Ba’Alawi, Head of UAEFIU said: “The UAE is committed to helping protect the global economy from money laundering, terrorism financing, and other financial crimes through international coordination and collaboration. By contributing to the ECOFEL program, the UAEFIU is helping to strengthen and support international efforts to tackle ML/TF and protect global financial integrity, peace, and security by ensuring all FIUs have access to expert training and resources.”

The Egmont Group said in a statement: “Thanks to the support of the UAEFIU and other donors, the ECOFEL continues to deliver professional training and knowledge to FIU personnel across the globe and empower FIUs to strive towards excellence and leadership,”

AML Intelligence
We hope you enjoyed reading this article

If you would like unlimited access to AML Intelligence premium articles, newsletter delivered twice a week, access to our Global Bank Fines and Penalties database, free access to Boardroom Series events and much more, select one of our subscription options and become a subscriber!