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Navigating The Complexity of Ownership From The Lens of Sanction By Extension

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Lapses in UBO Identification, Sanctions Compliance, and Corporate data

Tuesday, 30th April. 13:00 - 14:00 London Time (GMT+1)

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Mark Bain

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Louie Vargas

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Dirty Money in Paradise? Dubai Leaks Triggers Ownership Concerns in Real Estate Sector

15 May, 2024

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Dubai, a business hub renowned for its elevated skyscrapers, prosperous lifestyle, and position as a global economic hub, sparks a new concern globally. Despite being the playground for the rich and famous, the Gulf City holds lax regulations in the real estate industry, making it an attractive investment point for elites, political entities, and imposters globally. Dubai Leaks, a coalition of about 70 media platforms, discloses this Middle Eastern economic hub has extended its doors to people charged with corruption worldwide. Read this article and discover how “Dubai Unlocked” is a contemporary cause of concern for businesses and international law enforcement authorities globally.

Dubai Unlocked: A Question Mark on the Real Estate World?

Today, Dubai’s booming property market, a magnet for foreigners, has a dark side. Secrecy in the real estate sector allows criminals to hide. Foreigners make up around 90% of the inhabitants. Nevertheless, the official registry records are difficult to obtain in the region as no open access is available. This leaves a prominent loophole for international law enforcement agencies since they cannot identify which citizen owns how much property in the United Arab Emirates.

While previous investigations focused on regions and countries, Dubai Leaks primarily focused on real estate ownership. The revealed logs, dated mainly from 2020 and 2022, were originally acquired by the Center for Advanced Defense Studies, A Washington, D.C.-based nonprofit organization conducting a study on international crime & conflict. The details were later communicated with the Norwegian financial outlet E24 and the Organized Crime and Corruption Reporting Project (OCCRP), which initiated an investigation project in collaboration with 75 media outlets.

Revelation Uncovered by Investigative Journalists

The extensive report was recently shared by reporters who identified individuals worldwide owning properties in Dubai without revealing their ownership details in public registries of the region. These figures include everyone, whether money launderers, drug lords, political entities accused of corruption, as well as their associates or business owners sanctioned due to financial terrorism.

Using the data as a foundation, journalists examined the circumstances of foreign property ownership in Dubai. Throughout several months, they diligently examined released datasets, open-source research, government documents, and additional compromised datasets to validate the implicated individuals’ true identities and ownership status. To ensure the initiative’s integrity, reporters have exclusively recruited individuals whose identities could be verified externally.

Furthermore, the integrity of the individuals listed in the data was verified by consulting Dubai’s official land registry. Due to the recent property sale, reporters were occasionally unable to ascertain the present ownership status of certain items. Supplementary measures were implemented to validate the individual’s property ownership status in Dubai, including cross-referencing their passport particulars with a publicly accessible government database containing information on property owners.

Source of Dubai Property Data

The project’s primary source of property records is a series of data breaches, mostly from publicly owned utility firms and the Dubai Land Department. When combined, the data provides a thorough picture of hundreds and thousands of properties in Dubai as well as who owns them and how they are used. The information was acquired by the non-profit Center for Advanced Defense Studies (C4ADS). The Organized Crime and Corruption Reporting Project (OCCRP), which oversaw an investigation involving several media outlets from throughout the globe, and the Norwegian financial portal E24 were then given access to it.

Along with other identification details with date of birth and passport number, the data contains the controlling party of every property. Economists from The EU Tax Observatory and Norway’s Centre for Tax Research, who examined the stolen data, projected that foreign ownership in Dubai’s property market would be worth $160 billion in 2022. For this research, these organizations decided to spotlight around 200 persons who possessed over 1,000 assets that we discovered in the data and then confirmed. These people included political officials, illegal immigrants, accused criminals, and sanctioned persons.

Is Dubai Leaks Different from Other Investigations?

Dubai has been identified for years as a significant hub for money laundering, with its real estate sector being a particular target. Prior inquiries have concentrated on the real estate properties of individuals from various countries across the world. However, Dubai Unlocked stands as the inaugural undertaking of its nature to examine ownership in the city from an international standpoint. Furthermore, it is constructed upon more reset databases primarily comprising property records that were compromised in 2022 and 2020.

From government officials accused of corruption to businesses sanctioned for supporting terrorism, among many others, journalists have identified hundreds of Dubai property owners they feel the public should be informed about.

A Wake-Up Call for UBO Disclosure?

The leaks serve as an explicit wake-up call for the UAE to bring regulations in place while taking the following regulatory measures.

  • Revealing Discrepancies: Dubai leaks expose properties owned by individuals who don’t appear as legal owners based on ultimate beneficial owner UBO data. This could indicate suspicious activity or the use of shell companies to hide actual ownership.
  • Identifying Missing Information: The leak reveals property ownership by individuals not currently listed in any UBO registry, requiring prompt investigations into the source of their funds and potential criminal activity.
  • Strengthening UBO Laws: The Dubai Unlocked particularly highlights weaknesses in existing UBO regulations in Dubai. It clearly indicates how it is crucial to adopt stricter laws requiring more comprehensive and transparent ownership disclosure.

Enhanced Transparency Laws: A Global Requirement

The Dubai leaks serve as a call for nations worldwide to wake up and realize the significance of implementing transparency laws on a global scale. Enforcing strict business ownership regulations and improving public access to financial information. Furthermore, requiring companies and trusts to disclose ownership information in a central, public registry would increase scrutiny and make it harder to hide beneficial owners. This is the time for countries to take steps to prevent future scandals and build trust in their economic systems.

How The KYB Can Help

With its extensive data sources across 300 Million+ companies worldwide, the KYB, a world-class source of UBO compliance and business verification, helps companies and nations expose businesses owned by individuals on sanctioned lists or with criminal ties. This triggers investigations into these businesses and potential sanctions for non-compliance. Additionally, the recent leaks require companies and officials in Dubai to be more vigilant about checking potential partners or clients against the Dubai Leaks data.

Ensure compliance with Ultimate Beneficial Owner (UBO) and other regulations to add an extra layer of security with the KYB.

To learn more about how The KYB can help you in the verification of businesses, Get in touch with our team for further information.

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