United Arab Emirates Central Bank governor Sultan Bin Nasser Al-Suwaidi won widespread recognition as the Emirates’ top financial regulator. His efforts to toughen up bank and money transfer regulation, and his management of the UAE’s income from the oil boom, primarily generated by Abu Dhabi National Oil Company (Adnoc) provided urgent, visible action after the UAE came in for searching scrutiny after the 11 September 2001 attacks. The UAE was one of only three governments (with Pakistan and Saudi Arabia) that recognized the Afghan Taliban government. As western governments started to investigate “terrorist financing”, regional trading hub Dubai, in particular, was seen as a potential transit point for people and money.
Al-Suwaidi has shown that the Abu Dhabi authorities can control potentially dubious financing flows, while still keeping open the legitimate and cost-effective financing ones – above all the low-cost hawala system of informal transfers used by migrant workers in the Gulf to send their savings home. Most of the UAE’s 170 hawaladors remain in business, but are now subject to regular transaction reporting requirements.
“It is better to control it than prohibit it,” Al-Suwaidi told Emerging Markets: “By covering hawala under our regime we have covered the three dimensions of the financial transfer system – formal transfers through banks, formal transfers through exchange houses and informal movements through hawala.”
Internal supervision has been strengthened. “We have mandated and required banks and money changers to appoint financial compliance officers who will be questioned by the Financial Intelligence Unit and required to organize training,” Al-Suwaidi said: “We have an army. We also have a mechanism – which is very important – we communicate across the UAE through the National Anti-Money Laundering Committee.”
Al-Suwaidi insists the UAE will remain on its guard. “The most important thing is to keep our eyes and ears open... Genuine business will feel more comfortable, actually, to go to a place where there are better safety nets against money laundering and terrorist financing,” the governor concluded.