INSIGHT: UAE’s ‘Falcon Economy’ at full tilt as Emirates complete third milestone of fincrime strategy; NRA to be launched in weeks

THE United Arab Emirates’ (UAE) “Falcon Economy” is performing at full tilt, with strong foreign direct investment and major infrastructural projects underway.

At the same time, the Emirates has been busily finalizing its strategy on Anti-Financial Crime (AFC) and AML measures marking out three major milestones.

This includes the impending release of its National Risk Assessment (NRA) early this year, AML Intelligence has learned.

The release of the NRA is one of the three milestones in the AFC space for the UAE which have been worked on by senior ministers and officials over the past three years and which the country describes as long-term and sustainable.

The other two milestones from the second half of 2024 include:

• the publication of the country’s National AML/CFT Strategy; and
• the creation of the country’s new AML super-agency, the General Secretariat

The National Strategy was approved at the top levels of the UAE government, giving a clear signal that it is enforceable across all agencies, federal and local, a source said.

Almost 50 different public and private agencies were involved in the creation of the strategy.

Late last year the creation of the new AML agency with an enhanced mandate was announced and it came into law in December. It is known as the General Secretariat of the National Anti-Money Laundering and Combatting Financing of Terrorism and Financing of Illegal Organizations Committee (NAMLCFTC).

The General Secretariat and NAMLCFTC report to the Higher Committee, the country’s top AML committee chaired by HH Sheikh Abdullah bin Zayed Al Nahyan, Deputy PM and the Minister for Foreign Affairs, and featuring other key ministers.

Insiders say that since its removal from the FATF “grey list” in February 2024, the UAE has continued to press on with the strengthening of its national AML/CFT system, with the new General Secretariat playing a central role.

Moreover, the reconstitution of key AML committees was followed by the publication of a National Strategy for AML/CFT/CFP 2024-27 using insights from the forthcoming National Risk Assessment, which is now due for public release over the next few weeks.

Furthermore, new Mutual Legal Assistance Treaties (MLATs) were signed with Sweden and Ireland last year – taking the total to 48.

These agreements have seen a series of high profile criminals being subject to extradition cases to several EU countries – including:

• Sean McGovern – Kinahan Cartel lieutenant arrested in Dubai last autumn;
• Nordin El Hajjioui – extradited to Belgium last March;
• Danilo Coppila – fincrime fugitive extradited to Italy last August; and
• Faissal Taghi – notorious criminal extradited to Netherlands in 2023

Insiders also point to the UAE investing heavily in the FATF global network. The country has become an observer member at the APG and EAG, and hosted the APG annual meeting in Abu Dhabi in 2024 -the first time it is held in the MENA region. The UAE will also hold a joint presidency of MENAFATF with Jordan for 2025-27.

The Falcon Economy

Last month, Abu Dhabi Finance Week saw thousands of international bankers and investors descend on the so-called “Capital of capital” to witness firsthand the soaring “Falcon Economy.”

There’s been average growth of close to 9pc over the last three years according to Monica Malik, chief economist at Abu Dhabi Commercial Bank told the conference.

Much of the growth is coming from massive infrastructure projects, such as a new airport terminal built last year, but financial services is now 13pc higher than pre-pandemic and manufacturing is up 14pc. 

Chris Hughes, who organizes the conference with Abu Dhabi Global Market (ADGM) told how 20,000 delegates attended the event, with some of those attending the VIP Day on Monday spending $10,000 for an executive ticket.

There were certainly some “whales” here with BlackRock chief executive Larry Fink announcing in a video message that the world’s biggest asset manager is opening an office in the emirate. 

On the ground was Ray Dalio, founder of Bridgewater Associates, who said places like Singapore and UAE are likely beneficiaries of increasing geopolitical tensions, particularly between the US and China. Author of “The Changing World Order” – which studied the rise and fall of world powers –  his message was that neutral countries are the winners in these tumultous times.

All major countries apart from Germany have rising debt and there is a debt crisis coming he says which “will lead to a decline in the value of money.”

Dalio says there are three principles to look for when deciding to invest as the world faced the most significant power challenge since 1935-1940, says Dalio. Seek out a place where it’s easy to do deals, there is internal order not disorder and there are smart people with good living standards.  

Another visitor was Donald Trump’s son Eric who dropped into the VIP room at Finance Week before speaking at a bitcoin conference where he was holding a “whale-only” chat, which attracted a $10,000 entry. 

One thing that is clear is that optimism abounds here under the clear skies and 25C. Finance Week itself is hosted at the headquarters of Abu Dhabi Global Markets which makes an ideal indoor and outdoor conference and exhibition centre. Next door are the upmarket Four Seasons and Rosewood hotels as well as giant mall filled with flagship designer stores. From the Rosewood, overlooking the Gulf you can see the megayachts glistening in the sun and visiting cruise ships. 

If the US has turned downright cold towards China and the EU dithers, officials from Beijing are welcomed with open arms here. On the second day of the event delegates were woken to the sounds of a Chinese national choir while HSBC hosted a China-UAE Investment Summit, with one of the sessions celebrating “40 Years of Bridge Building” between the countries.

Another session heard from HSBC’s senior economic advisor Stephen King who spoke about the end of globalisation and the emergence of “slowbalisation” and “the return of history.”

Dubai is well recognised as the Gulf’s major tourism destination but tourism is also growing in Abu Dhabi, the conference heard, with visitor numbers up in the double digits. AD Commercial Bank’s Monica Malik said occupancy rates at 77pc (up 10pc) which is higher to neighbour Dubai, one hour down the highway.

Group CEO of Etihad Airways Antonoaldo Neves told delegates the airline would add ten new aircraft next year and 22 new destinations. Flights to Europe would increase significantly with improved options over the current 2.0am flights to include departures around 9.0am and 11.0am.

ADGM’s Head of Global Outreach Chris Hughes meanwhile reckons European countries could learn a lot from the UAE’s strategy of big infrastructure projects and investment such as in the airline, airport and hospital building. Indeed at the Rosewood one of the options in the elevator is a connection to the glitzy and massive Cleveland Clinic hospital next door.

A European ambassador attending the conference saw real potential for EU countries and investors here.

“It is seen as a land of opportunity and forward-vision and is positioning itself at the centre of global affairs, particularly on AI, space and advanced tech,” Ireland’s ambassador Alison Milton observed.