In 2014, a businessman made a routine call from the fancy neighborhood of Clifton in Karachi, Pakistan. He was checking with his assistant, Yasir, on the status of his real estate investment in Dubai’s Al Khail Gate, an upscale community of apartments and townhomes close to several international schools, malls, and recreation centers.1 The conversation was the normal sort of back and forth on building permissions, the escrow account, advertising, and sales numbers. But, in actuality, the call was anything but ordinary: the businessman was Dawood Ibrahim, a transnational criminal with a net worth of about $6.7 billion and, at the time, India’s most wanted man.2
Tapes of Ibrahim’s conversation caused quite a stir in India when they were released in April 2018. Many believe he was the mastermind behind a spree of terrorist bombings in Mumbai in 1993 that killed over 250 people and injured 1,400.3 The U.S. Federal Bureau of Investigation continues to investigate his criminal enterprise known as D-Company, which reportedly operates from India, Pakistan, and the United Arab Emirates (UAE).4 He also is on the United Nations Security Council’s al-Qaeda sanctions list for his support of and participation in activities linked to al-Qaeda and the Taliban.5
The tapes highlight the unique and often underappreciated role that Dubai plays in various illicit activities throughout the world, despite its being renowned as an international banking center, a global trade hub, and a stable polity in an otherwise unstable region. While the vast majority of transactions involving Dubai are not associated with corruption or criminal activity, criminals and kleptocrats frequently launder or stash illicit proceeds in Dubai—often via high-end real estate purchases. Dubai’s many free trade zones and globally connected financial institutions are also exploited to conduct trade-based money laundering. Likewise, gold of dubious providence can be brought into Dubai relatively easily and then be processed and reexported. And unlike many major banking locales, Dubai is not just a waystation for money but also an investment destination in itself.
Dubai offers neutral territory for many illegal and quasi-legal groups.
Relatedly, Dubai offers neutral territory for many illegal and quasi-legal groups. Dubai’s royal family upholds an exceptional balancing act: the emirate absorbs the financial proceeds from crime and conflict worldwide, while its middle-class and more privileged residents continue to enjoy largely safe streets and good living conditions. (Dubai’s response to the new coronavirus outbreak has thus far been rigorous—perhaps even draconian.)6 Terrorist attacks are rare, and the emirate has weathered upheavals like the Arab Spring with little protest, let alone the violent demonstrations, regime changes, and civil wars that have affected other countries in the region. This peace is due at least in part to the robust security and surveillance apparatus built by the Emirati state at the expense of residents’ civil liberties.7
Various leaked documents—from the Panama Papers to Angola’s Luanda Leaks documents to Dubai’s own property registry—demonstrate that Dubai is a place where many people associated with criminal activity feel free to settle down with their families, manage their networks, and engage in smuggling and money laundering.8 Moreover, the emirate offers its residents a luxurious lifestyle and amenities—shopping, dining, nightlife—on par with other global top city destinations, including London, New York, and Paris. While Dubai has undertaken various reforms to bring the operations of trade and financial institutions more closely in line with international standards, significant loopholes continue to enable criminal activity.
Of course, numerous other countries also offer havens for illicit gains and luxurious lifestyles. For example, the United Kingdom (UK) and United States are well-known hubs for money laundering. Their robust real estate markets present plenty of opportunities to invest or launder money and/or settle down. But in these countries, criminals and kleptocrats have to maintain a degree of anonymity and take significant pains to hide the sources of their funds in case of a law enforcement investigation. Meanwhile, strong, often transnational networks of civil society and media aggressively seek to expose malfeasance and lobby their governments to make needed reforms. Further, unlike the UAE, many other key banking, trade, and real estate hubs, including the United States, UK, and other European countries, are gradually introducing and strengthening measures to combat illicit activity, thus making these hubs less attractive to criminals and kleptocrats.
Dubai therefore enjoys a comparative advantage over these other locations. Emirati authorities ask far fewer—and more perfunctory—questions about the provenance of goods or money involved in a range of trade, finance, and real estate transactions. The likelihood that a foreigner’s financial activities would be scrutinized is low. Institutional weaknesses, especially a lack of standardization among various free trade zones, facilitate regulatory arbitrage for those seeking to exploit anti–money laundering loopholes.
These lapses in administrative oversight are compounded by law enforcement shortcomings. As Chapter 7 describes, governments asking Dubai for law enforcement cooperation to catch and prosecute international criminals or freeze their finances confront a byzantine system in which their requests often do not reach the relevant officials. And even when they do, some requests go unanswered. While Dubai has assisted with several investigations related to terrorism finance and organized crime, some international law enforcement officials consider Dubai—and the UAE writ large—to be a difficult partner. As the FATF recently noted for the UAE overall, “While the UAE has a sound legislative basis for international cooperation, it has provided mutual legal assistance (MLA) and extradition to a minimal extent considering its exposure to foreign predicate offenses and associated proceeds of crime”—though the report goes on to note that informal cooperation is often better than formal cooperation.9
This is not to say that Dubai lacks the capacity to cooperate or implement internal reforms. Emirati authorities have employed robust measures to extinguish internal dissent—for example, effectively outlawing criticism of the government by civil society groups and local media and swiftly cracking down on protests. More rigorous law enforcement efforts are possible as well as necessary given Dubai’s broad and deepening connections to international financial markets. No longer just a regional entrepôt, Dubai is a truly global trade and investment hub and an attractive residential and deal-making destination for some of the world’s most wealthy and powerful people. These linkages are not problematic per se but rather represent the conduits through which illicit money can flow.
Dubai’s Global Linkages
Even in an age of globalized cities, Dubai stands out due to its considerable financial and strategic influence and how quickly it achieved such importance. Though Dubai became a free port in the early twentieth century, well into the 1980s it was still not obvious to the astute observer that the city would eventually become a global hub of business and finance.10 After all, Dubai only had 59,000 people according to its first census in 1968.11 It only allowed offshore banking institutions starting in 1975 and had no significant history of banking up until the 1990s. Put simply, Dubai lacks the long and storied financial history found in the cities of London, New York, Tokyo, or other global banking centers.12
Even in an age of globalized cities, Dubai stands out due to its considerable financial and strategic influence and how quickly it achieved such importance.
Nor does Dubai possess a natural harbor location with fresh water and ready supplies like Mumbai or Singapore. The Dubai Creek was barely navigable even by sailing vessels until dredging operations began in the 1950s, and it did not have significant berthing capabilities until the 1980s.13 But today, Dubai has the largest man-made harbor in the world and the biggest port in the Middle East. And although Dubai did not set up its first free trade zone (at the port of Jebel Ali) until 1979, now there are about thirty zones in the emirate.14 A free trade zone is a special area in which foreign companies can import and export materials and manufacture goods without being subject to the same national rules and taxes.
Likewise, Dubai did not build its first airport until the 1960s, and Emirates Air was only a four-aircraft airline when it started operations in 1985.15 But the Dubai emir chose to build an international airline—and the airport and cargo facilities to go with it—at breakneck speed starting in 1991.16 As a result, in 2015, Dubai International Airport overtook London’s Heathrow Airport as the world’s busiest airport for international travelers.17 As a booming tourist destination, Dubai has gone from having 42 hotels with 4,600 rooms and 400,000 visitors in 1985 to over 700 hotels with 100,000 rooms and almost 16 million visitors in 2018.18 It was only in 2002 that Dubai allowed foreigners to buy real estate under certain conditions, but today, it has a user-friendly real estate system with minimal residency requirements: a property investment of only $272,000 or more comes with a two-year visa for the purchasers and their family members. Some business visas are even cheaper.19 Given this, it is easy to understand how Dubai has rapidly become an attractive location for property and business investments.
Today, Dubai has the largest man-made harbor in the world and the biggest port in the Middle East.
Such investments have helped expand Dubai’s regional and international economic ties. Its connections to neighboring Iran, for example, are durable and long-standing even amid periodic Western sanctions. During the Iran-Iraq War in the 1980s, Dubai had leaned toward Iran and had served as a major transit point for war materiel headed there.20 By 2010, following waves of Iranian migration—especially after the 1978–1979 Iranian Revolution—nearly 10,000 Iranian businesses were based there and Iranians outnumbered local Emiratis in the UAE three to one.21 This shift precipitated about $15 billion in capital flight to Dubai in 2007 alone and cemented the emirate’s position as Iran’s largest trading partner.22 By 2011, Iran accounted for about one-quarter of total exports from the UAE, despite a 2007 threat by the United States to cut off UAE-based firms from the U.S. financial sector if they continued to facilitate sanctions busting.23
Asia—especially the Indian subcontinent—also has a long history of commerce with Dubai. Indians are heavily involved with trading pearls, which, until the 1930s, were the primary export for the Arabian Gulf. At the same time, because Dubai’s inhabitants generally saw real estate investing and shop keeping as undesirable occupations, migrant Indians took over this niche.24 By 2010, about 1 million Indians were living in Dubai, and they continue to be a large backbone of its economy, especially the skilled worker class and the construction sector.25
Also notable is Dubai’s thriving trade relationship with China. While Dubai-China trade flows are not necessarily suspicious, they could be exploited by the trade-based money laundering schemes described in Chapter 3. In 2014, an estimated 70 percent of all manufactured goods that left China by sea initially docked in Dubai.26 That same year, there were 300,000 Chinese residents in Dubai, along with 4,200 Chinese companies registered in the UAE.27 Especially prominent is Dragon Mart, an emporium of almost 4,000 vendors that handles retail and wholesale customers. In fact, many traders in places like Africa actually travel to Dubai to place orders for Chinese goods rather than travel to China.28
Looking west, Dubai’s personal and financial ties to Russia and other European countries have also deepened in recent years. In 2016, the Russian Business Council Middle East and Africa estimated that 100,000 Russians were residing in Dubai and noted that they have historically been the highest spenders in the annual Dubai Shopping Festival.29 In 2018, Europe accounted for 19 percent of Dubai’s non-oil trade, making it second after Asia.30 Unfortunately, as Russian organized crime expert Mark Galeotti notes, “Dubai has become something of a hub and haven for gangsters from Russia and other post-Soviet countries.”31
Dubai also enjoys significant financial and trade relations with sub-Saharan Africa. According to the Dubai Chamber of Commerce and Industry, during the period 2011–2018, cumulative non-oil trade between Dubai and countries in Africa amounted to $252 billion, and the UAE ranks among the top ten sources of foreign direct investment in sub-Saharan Africa.32 It is a major trade hub between Africa and the rest of the world.
Just as quickly as its legal trade and financial flows have grown, so too has Dubai’s role as a global node for illicit and dubious activities.
Just as quickly as its legal trade and financial flows have grown, so too has Dubai’s role as a global node for illicit and dubious activities. Dubai’s earliest links to criminal activity related to smuggling, especially of gold and slaves. Smuggling became an important driver of the economy.33 Saif al-Ghurair, a member of one of the leading merchant families, has described how he smuggled stolen ammunition and gold in the 1940s and 1950s, often by transporting gold to India via special vests worn under his clothing.34 In 1958, the emir at the time, Sheikh Rashid bin Saeed Al Maktoum, in discussions with the British Foreign Office, acknowledged the importance of smuggling to the city’s economic health. Dubai also allowed the smuggling of hashish and opium from Iran and later Afghanistan; though today, Dubai advertises a zero tolerance policy on drug trafficking and often publicizes drug busts.35
Since its independence in 1971, Dubai’s role as a node for a variety of illicit activities has grown. For instance, Liberian dictator Charles Taylor used Dubai as a supply base and place to buy weapons. And a famous Russian smuggler, Viktor Bout, used Sharjah, a city northeast of Dubai, as a base of operations for his worldwide fleet of aircraft. The Taliban and al-Qaeda reportedly moved gold out of Afghanistan and through Dubai, sometimes on Bout’s aircraft.36 Until 2004, Dubai was used to help smuggle nuclear parts to Iran and Libya as part of Pakistani nuclear scientist Abdul Qadeer Khan’s clandestine nuclear weapons programs.37 Indeed, even before the September 11, 2001, terrorist attacks, the United States was concerned about money laundering and illicit financial flows through Dubai banks—a concern that only heightened after the attacks.38
The links between terrorism finance and Dubai brought the city into the spotlight in the early 2000s, forcing it to institute anti–money laundering and counterterrorism finance initiatives. However, numerous loopholes remain, evidenced by a leaked database of Dubai property and residency data comprising 54,000 addresses and 129,000 owners from 181 countries. The database includes crime bosses, sanctioned individuals, and politicians allegedly living well beyond their means.39
Despite well-publicized reforms, the anecdotes in Table 1 indicate that Dubai remains a globally attractive locale for a range of illicit and smuggling activities. The cases also highlight some of the tensions between Dubai’s need to meet and maintain international standards—such as in the enforcement of sanctions—and the potential economic distress from enforcing these standards and cutting long-established, profitable ties.
|Table 1. Examples of Illicit Financial Flows Associated With Dubai|
|Kambiz Mahmoud Rostamian||In 2017, the U.S. Department of the Treasury sanctioned Rostamian for helping to buy materials for Iran’s ballistic missile program using a Dubai-based company. He also owns five properties in Dubai worth $2.7 million.40|
|Hossein Pournaghshband||In 2016, the U.S. Department of the Treasury sanctioned Pournaghshband for helping Iran procure materials for its ballistic missile program. He used his Dubai-based firms to buy them from Hong Kong and mainland China.41|
|Beneathco DMCC||In January 2020, the U.S. Department of the Treasury sanctioned this petrochemical company in Dubai for helping Iran’s state oil company hide the origin of petroleum products transiting through the UAE.42|
|India, Afghanistan, and Pakistan|
|Altaf Khanani||U.S. and Australian police arrested Khanani—a Pakistani national—in Panama in 2015. His operation reportedly laundered $14 billion annually for al-Qaeda, the Taliban, Mexican drug dealers, and Hezbollah.43 In 2017, he pled guilty in a U.S. court to conspiracy to commit money laundering; thirteen other charges were dropped in return for his cooperation.44|
|Sherkhan Farnood||Ahead of Afghanistan’s 2009 presidential election, $600 million was removed from the country’s banks by various elites and transported to Dubai, according to a leaked diplomatic cable.45 Farnood—a co-founder of Kabul Bank—facilitated bank fraud totaling almost $1 billion (see Chapter 9).|
|Taliban||In 2018, the Washington Post noted that senior Taliban officials reportedly make frequent trips to Dubai. One U.S. official noted that—when pressed on Taliban presence there—UAE officials would say “it’s complicated.”46|
|Europe and Russia|
|Kamchibek Kolbayev||The United States sanctioned Kolbayev in 2012 for his ties to The Brothers’ Circle, an organized crime group. He has overseen various criminal activities in Central Asia and used the northern heroin smuggling route to bring drugs from Afghanistan into Russia and Europe.47 He is still linked to an apartment in Dubai Marina, according to the U.S. Department of the Treasury.48|
|Carousel Scandal||Partly run by Imran Yakub Ahmed, the Carousel scheme defrauded the UK, Italian, and German governments of value-added tax (VAT) proceeds during the 1990s and 2000s. Ahmed received a suspended sentence from an Italian court in 2017 for tax fraud linked to the Carousel scheme, and his firm is now being investigated in Germany over a $220 million fraud. Ahmed—who denies all wrongdoing—reportedly owns two floors in the Burj Khalifa.49|
|Sanjay Shah||UK authorities raided Shah’s hedge fund—Solo Capital—in 2016 and closed it down.50 Shah is also being investigated in Belgium, Denmark, Germany, Norway, the UK, and the United States for tax fraud.51 The Danish prosecution involves a $1.8 billion fraud conducted from 2012 to 2015.52 Shah now lives in Dubai and, as of 2014, owned six properties worth $56 million.53 He denies all of the fraud charges, and there is no suggestion of wrongdoing regarding his purchases.54|
|Dan Etete||Currently standing trial in Italy for bribery and embezzlement, former petroleum minister Etete has allegedly laundered significant sums through Dubai—including $21.5 million through the UAE-registered money-changing firm, Gunes General Trading.55 According to leaked records, Etete has lived in Dubai’s luxurious Emirates Hills development since at least 2015.56 Etete denies all wrongdoing.|
|Kaloti Precious Metals||In 2012, Kaloti Precious Metals—the largest gold refinery in Dubai—reportedly purchased 44 tons of gold from Sudan and then sold it to a Swiss refiner, despite U.S. sanctions on Sudanese gold.57 The company denies any impropriety.58 Much of the gold allegedly came from mines in North Darfur overseen by Mohamed Hamdan Dagolo (“Hemeti”), Sudan’s de facto leader since the April 2019 overthrow of former president Omar al-Bashir.59|
|Isabel dos Santos||Dos Santos—the daughter of Angola’s former president—allegedly used her connections and position as head of the state oil company to amass a fortune worth over $2 billion, according to the Luanda Leaks investigation.60 Of that sum, dos Santos allegedly deposited over $57 million in a shell company owned by a Dubai-based friend and, as of June 2019, had moved to the emirate, according to a Maltese commercial register.61 In January 2020, Angolan authorities charged her with corruption; she denies all charges, however, claiming that the leaks and allegations are politically motivated.62|
|Al-Shabaab||Significant quantities of charcoal are smuggled into Dubai, enriching the Somali terrorist group al-Shabaab and contributing to deforestation in the Horn of Africa.63 The United Nations (UN) banned charcoal exports from Somalia in 2012, but it remains a $150 million per year industry for criminals who reportedly bribe Emirati officials for false certificates of origin for the charcoal.|
|Venezuelan gold||Gold flows between Venezuela and Dubai appear to have an illicit dimension. In 2018 and 2019, Venezuela’s Central Bank improperly sold 73.2 tons of gold to two UAE-based companies.64 In January 2019, 3 tons of gold drawn from central bank reserves was sold in the UAE, providing the Maduro regime with needed foreign exchange. Gold has also been transshipped to Dubai via Aruba, according to investigative reports.65|
|Ezio Benjamin and Hassein Eduardo Figueroa Gomez||Mexican narco-criminals sanctioned since 2012 under the United States’ Foreign Narcotics Kingpin Designation Act, this father and son have used Dubai as an operating base. Though Ezio is in a U.S. prison, Hassein still uses Cypriot companies registered at a Dubai address to conduct activities.66|
Dubai’s Darker Side Illuminated
Taken together, the following chapters illustrate Dubai’s unique role in facilitating criminal and corrupt activity. Each chapter explores a particular vulnerability in Dubai’s legislative and regulatory systems and trade, business, and financial operations. In Chapter 2, Kristian Ulrichsen outlines Dubai’s political economy. Unlike Abu Dhabi, Dubai has relatively little oil. Its oil production peaked in 1991, and as a result, the Maktoum royal family moved quickly to diversify its economy away from oil into trade, banking, real estate, and tourism. These diversification efforts yielded rapid economic growth until the emirate’s real estate bubble burst in 2008, forcing it to seek a bailout from its richer neighbor, Abu Dhabi.
In Chapter 3, Lakshmi Kumar examines the part that Dubai’s complex legislative and regulatory environment plays in enabling trade-related illicit activity. Dubai’s leadership both promotes commerce and finance within the emirate and oversees compliance with national and international standards. This dual role has led to a high degree of regulatory state capture. Meanwhile, each free trade zone has its own commercial regulations, and the Central Bank, the Dubai Financial Services Authority, and Dubai Customs have limited oversight roles. Thus, the definitions and requirements for documenting and verifying corporate beneficial ownership information are not standardized across each zone. Likewise, this weak oversight makes it relatively easy to repack and relabel products transferred through Dubai’s free trade zones, further facilitating trade-based money laundering. This complex structure creates many loopholes and opportunities for regulatory arbitrage ripe for criminal organizations to exploit.
In Chapter 4, Shawn Blore and Marcena Hunter highlight the weaknesses in Dubai’s oversight of gold commodity trading. The Dubai Multi Commodities Centre is both the chief promoter and regulator of Dubai’s gold and minerals trade. Responsible sourcing rules for gold are voluntary, and only three of the eleven gold refineries in the UAE officially follow them. Gold is remarkably easy to import through Dubai customs, and once the appropriate paperwork is acquired, a gold trader is free to sell it in the city’s gold souks. The gold is nominally conflict free, but almost half of it is imported from countries the Organisation for Economic Co-operation and Development has flagged as potentially conflict-affected or at high risk. Once processed through Dubai, the gold makes its way to the world’s leading gold hubs, such as India and Switzerland, or is reexported as jewelry to places such as India, Iran, and Iraq, where gold is often part of money laundering or conflict-driven financial schemes.
In Chapter 5, Peter Kirechu examines Dubai’s anti–money laundering and counterterrorism finance legislation and regulations. In particular, he focuses on Dubai’s weak oversight of nontraditional financial service providers—such as lawyers, real estate brokers, and precious metal dealers—who help facilitate the illicit activities of criminals and kleptocrats. After highlighting the weaknesses in Dubai’s prior efforts to comply with the intergovernmental Financial Action Task Force’s standards for fighting money laundering and illicit financial flows, Kirechu assesses whether the emirate’s recent legislative reforms, especially laws passed in 2018, will have any effect. The outcome may largely depend on whether Dubai and the UAE as a whole standardize their anti–money laundering and counterterrorism finance standards and regulations across their free zones.
In Chapter 6, Peter Kirechu and Jodi Vittori assess Dubai’s real estate market and associated money laundering. Most Dubai real estate investments are legitimate but a significant and growing number are not. In 2018, the Center for Advanced Defense Studies (now known as C4ADS) identified forty-four Dubai-based luxury properties directly associated with seven individuals sanctioned by the United States or European Union member states. The sanctions were imposed for a range of illicit activity, including conflict financing, narcotics and weapons trafficking, terrorism financing, or grand corruption. The Organized Crime and Corruption Reporting Project, run by a global network of media centers and investigative journalists, has also linked multiple property holdings in Dubai to politically exposed persons, their family members, and business associates from a diverse set of countries, including Pakistan, Russia, South Africa, and Thailand.
In Chapter 7, Karen Greenaway evaluates the law enforcement capabilities of Dubai and the UAE. While the emirate’s agencies appear well-trained overall, they may not have the investigative techniques needed to combat money laundering, corruption, and organized crime—in part due to their lack of relevant training and limited cooperation with investigative units globally. International cooperation is further hampered by the alleged misuse of INTERPOL Red Notices (for a wanted person) and by Emirati authorities’ use of torture, which delegitimizes any resulting testimony in most Western courts. Finally, the UAE’s complex web of federal and local law enforcement jurisdictions, as well as Dubai’s opaque command and control structure for policing and internal security, make international cooperation with investigators and other specialists trying at best. Further, despite Emirati commitments to various international and bilateral institutions and treaties, there has been little political will in either Dubai or the UAE writ large to effectively partner with foreign law enforcement on tackling illicit financial flows.
In Chapter 8, Mustafa Qadri assesses Dubai’s kafala system, whereby foreign nationals—especially low-wage and semi-skilled workers—must be sponsored by an Emirati national to reside and work in Dubai. This system shares characteristics with human trafficking—an illicit activity of growing international concern—and has led to abusive and exploitative working conditions. Despite recent reforms, these problems continue to some extent. One reason is that the Emirati government’s focus on sex trafficking has drawn attention away from labor exploitation. And another reason is that the kafala system is part of a social contract between Emirati leaders and its citizens. Businesses are often owned by Emirati citizens but managed by migrant workers on behalf of the sponsor, generating extensive wealth and social standing for citizens. This has become part of the bargain between the government and its citizens: citizens will have few rights but will be compensated with the opportunity to monetize their citizenship. Because of this bargain, labor and human rights reforms for noncitizens will continue to face considerable opposition from Emirati citizens.
In Chapter 9, Brian George examines the various financial and criminal linkages between Afghanistan and Dubai, arguing that these linkages—and Dubai’s lax policies—have contributed to Afghanistan’s continued instability. For example, prior to being convicted of fraud in 2013, Sherkhan Farnood, an Afghan powerbroker, successfully laundered millions of dollars for the Taliban, warlords, corrupt political leaders, and narco-traffickers. He did so by leveraging, among other tools, his Dubai-based trading company, an informal money transfer system (hawala) established between Afghanistan and Dubai in 1998, and a banking license. Much of the laundered money was invested in Dubai’s real estate sector or passed through to other banking locales around the world. Through Kabul Bank, co-founded by Farnood, Afghan politicians and warlords bought extensive portions of Dubai’s famous man-made Palm Jumeirah island. When the bank almost collapsed in 2010, many feared the fragile state’s economy and society would follow.
Finally, in Chapter 10, Jodi Vittori and Matthew Page offer recommendations to help anticorruption practitioners, policymakers, and international organizations prevent illicit financial flows from transiting through or being absorbed by Dubai. Advancing reform in Dubai will necessitate reducing Dubai’s economic dependence on illicit financial flows, which accounts for its leaders’ deep-seated resistance to reform. The emirate can wean itself off of illicit financial flows by enforcing existing laws more effectively and transparently; tightening and standardizing laws and regulations on real estate, gold, trade, and banking; and improving cooperation with international law enforcement. The international community—including governments, international institutions, and civil society—can provide the incentives by increasing its scrutiny of Dubai and those who operate there and by limiting Dubai’s opportunities for primping its reputation.
1 Arvind Ojha and Divyesh Singh, “Caught on Tape: How Underworld Don Dawood Ibrahim Manages His Business Empire,” India Today, April 10, 2018, https://www.indiatoday.in/india/story/dawood-ibrahim-d-company-business-empire-1208242-2018-04-09.
2 Ojha and Singh, “Caught on Tape: How Underworld Don Dawood Ibrahim Manages His Business Empire.” Note that all currency cited in this report is in U.S. dollars and uses the 2020 conversion rate unless otherwise stated.
3 “How the 1993 Blasts Changed Mumbai Forever,” BBC News, July 30, 2015, https://www.bbc.com/news/world-asia-india-33713846.
4 Naomi Canton, “US Tells London Court Dawood Is in Pakistan,” Times of India, July 3, 2019, https://timesofindia.indiatimes.com/world/uk/us-tells-london-court-dawood-is-in-pakistan/articleshow/70047592.cms.
5 United Nations Security Council, “Dawood Ibrahim Kaskar,” https://www.un.org/securitycouncil/sanctions/1267/aq_sanctions_list/summaries/individual/dawood-ibrahim-kaskar.
6 Sinéad Baker, “Dubai’s Intense COVID-19 Lockdown Requires an Online Permit, and Exhaustive Details, to Go Outside for Any Reason Whatsoever. This Is What It’s Like.,” Business Insider, accessed April 13, 2020, https://www.businessinsider.com/coronavirus-dubai-police-permit-leave-house-buy-groceries-2020-4.
7 “US Department of State Country Reports on Terrorism 2017—United Arab Emirates,” Refworld, September 19, 2018, https://www.refworld.org/docid/5bcf1f7415.html; and “Freedom in the World 2020 United Arab Emirates,” Freedom House, accessed April 29, 2020, https://freedomhouse.org/country/united-arab-emirates/freedom-world/2020.
8 “7772 UAE-Based Entities in Leaked Panama Papers,” Arabian Post, https://thearabianpost.com/7772-uae-based-entities-in-leaked-panama-papers/; Fergus Shiel and Hallman, “About the Luanda Leaks Investigation,” ICIJ (blog), January 15, 2020, https://www.icij.org/investigations/luanda-leaks/about-the-luanda-leaks-investigation/.
9 “Anti-Money Laundering and Counter-Terrorist Financing Measures: United Arab Emirates Mutual Evaluation Report,” Financial Action Task Force, April 2020, 12, http://www.fatf-gafi.org/media/fatf/documents/reports/mer4/Mutual-Evaluation-Report-United-Arab-Emirates-2020.pdf.
10 Jim Krane, City of Gold: Dubai and the Dream of Capitalism (New York, NY: Picador, 2010), 22.
11 Kristian C. Ulrichsen, The United Arab Emirates: Power, Politics, and Policy-Making (New York, NY: Routledge, 2017), 53.
12 Ulrichsen, The United Arab Emirates, 99–100.
13 Krane, City of Gold, 69–70.
14 Ulrichsen, The United Arab Emirates, 92–94.
15 Krane, City of Gold, 105–8.
16 Ibid., 108–11.
17 Ulrichsen, The United Arab Emirates, 119.
18 Krane, City of Gold, 117; and “Nearly 16 Million Tourists Visited Dubai in 2018,” Al Bawaba, November 10, 2019, https://www.albawaba.com/business/nearly-16-million-tourists-visited-dubai-2018-1257298.
19 Krane, City of Gold, 121–22; Ulrichsen, The United Arab Emirates, 94; and “Residency Visas and Banking,” OCCRP, June 12, 2018, https://www.occrp.org/en/goldensands/residency-visas-and-banking.
20 Ulrichsen, The United Arab Emirates, 67.
21 “The Nuclear Deal’s Other Winner,” Economist, July 23, 2015, https://www.economist.com/middle-east-and-africa/2015/07/23/the-nuclear-deals-other-winner.
22 Krane, City of Gold, 24–25.
23 Ulrichsen, The United Arab Emirates, 215–16.
24 Krane, City of Gold, 26–27.
25 Ibid., 199.
26 Ulrichsen, The United Arab Emirates, 155.
27 Ibid., 155.
28 Ibid., 155–57.
29 Ibid., 153.
30 “Dubai Chamber Hosts High-Level European Business Delegation,” Dubai Chamber of Commerce (blog), accessed February 18, 2020, https://www.dubaichamber.com/whats-happening/chamber_news/dubai-chamber-hosts-high-level-european-business-delegation.
31 Karina Shedrofsky, “Real Estate,” OCCRP, June 12, 2018, https://www.occrp.org/en/goldensands/real-estate.
32 Converted from UAE Dh926 billion at an exchange rate of US$1 to UAE Dh3.6729 (the exchange rate on January 31, 2019, per exchange-rates.org). Khan, “Dubai’s Non-Oil Trade with Africa to Touch Dh1 Trillion Over Nine Years,” National, November 18, 2019, https://www.thenational.ae/business/economy/dubai-s-non-oil-trade-with-africa-to-touch-dh1-trillion-over-nine-years-1.939195.
33 Ulrichsen, The United Arab Emirates, 32–34.
34 Krane, City of Gold, 73–74.
35 Ibid., 74.
36 Ibid., 279–80.
37 Ibid., 280.
38 Ulrichsen, The United Arab Emirates, 100.
39 Karina Shedrofsky, “Dubai’s Golden Sands: Free Trade Zones,” OCCRP, June 12, 2018, https://www.occrp.org/en/goldensands/dubais-golden-sands.
40 Sandcastles: Tracing Sanctions Evasion Through Dubai’s Luxury Real Estate Market (Washington, DC: Center for Advanced Defense Studies, 2018), 23–25, https://static1.squarespace.com/static/58831f2459cc684854aa3718/t/5b1fd4bf575d1ff600587770/1528812745821/Sandcastles.pdf.
41 Ibid., 33–37.
42 Brian Scheid, “US Sanctions HK, Dubai, Shanghai Companies for Oil, Petrochemical Trades With Iran,” S&P Global, January 24, 2020, https://www.spglobal.com/platts/en/market-insights/latest-news/oil/012420-us-sanctions-hk-dubai-shanghai-companies-for-oil-petrochemical-trades-with-iran.
43 “Catching the Money Man: How Australian Taxpayer Dollars and a Fake Drug Cartel Helped Bring Down the World’s Most Wanted Money Launderer,” ABC News, February 4, 2018, https://www.abc.net.au/news/2018-02-05/the-billion-dollar-bust/9383890.
44 Khurram Husain, “Khanani Gets 68 Months in US Prison,” DAWN, April 4, 2017, https://www.dawn.com/news/1324717.
45 Jonathan Steele and Jon Boone, “WikiLeaks: Afghan Vice-President ‘Landed in Dubai With $52m in Cash,’” Guardian, December 2, 2010, https://www.theguardian.com/world/2010/dec/02/wikileaks-elite-afghans-millions-cash.
46 Greg Jaffe and Missy Ryan, “A Dubai Shopping Trip and a Missed Chance to Capture the Head of the Taliban,” Washington Post, March 24, 2018, https://www.washingtonpost.com/world/national-security/a-dubai-shopping-trip-and-a-missed-chance-to-capture-the-head-of-the-taliban/2018/03/24/0137dd66-2ba0-11e8-8ad6-fbc50284fce8_story.html.
47 “What Is the Brothers’ Circle?” OCCRP, March 12, 2012, https://www.occrp.org/en/investigations/1393-what-is-the-brothers-circle; and Shedrofsky, “Real Estate.” Note that the term “The Brothers’ Circle” may be a term used by U.S. law enforcement to designate a networked Russian organized crime group. It is probably not a name used by the group itself.
48 “Sanctions List Search,” Department of Treasury Office of Foreign Asset Control, accessed February 2, 2020, https://sanctionssearch.ofac.treas.gov/Details.aspx?id=2831.
49 Madlen Davies, Ben Stockton, and Ferndinand Moeck, “From the UK to Dubai: On the Trail of the ‘Fraud of the Century,’” The Bureau of Investigative Journalism, June 9, 2019, https://www.thebureauinvestigates.com/stories/2019-06-09/from-preston-to-dubai-the-vat-fraud-trail.
50 Nick Mathiason and Margot Gibbs, “Dubai Leaks: Property Treasure Chest Owned by City Tycoon Suspected of Massive Tax Fraud,” Finance Uncovered, June 12, 2018, https://www.financeuncovered.org/investigations/dubai-leaks-sanjay-shah-solo-capital-properties-emirates/.
51 Margot Gibbs and Nick Mathiason, “British Financier Under Investigation for Tax Fraud Owned $56 Million in Dubai Properties,” Organized Crime and Corruption Reporting Project, June 18, 2018, https://www.occrp.org/en/goldensands/british-financier-under-investigation-for-tax-fraud-Owned-56-million-in-dubai-properties.
53 David Segal, “It May Be the Biggest Tax Heist Ever. And Europe Wants Justice.,” New York Times, January 23, 2020, https://www.nytimes.com/2020/01/23/business/cum-ex.html; and Gibbs, “Dubai Leaks.”
54 Mathiason and Gibbs, “Dubai Leaks”; Segal, “It May Be the Biggest Tax Heist Ever. And Europe Wants Justice.”
55 Margot Gibbs and Lionel Faull, “The Klepto Hills,” OCCRP, June 12, 2018, https://www.occrp.org/en/goldensands/the-klepto-hills; and Margot Gibbs, Lionel Faull, and Oladeinde Olawoyin, “Malabu Scandal: How Etete Bought Luxury Dubai Properties With Funds,” Premium Times of Nigeria, June 12, 2018, https://www.premiumtimesng.com/news/headlines/272004-malabu-scandal-how-etete-bought-luxury-dubai-properties-with-funds.html.
56 Ibid.; Margot Gibbs, Ted Jeory, and Lionel Faull, “Nigerian Oil and Dubai Land,” OCCRP, June 12, 2018, https://www.occrp.org/en/goldensands/nigerian-oil-and-dubai-land.
57 “Gold and Diamond Markets,” OCCRP, June 12, 2018, https://www.occrp.org/en/goldensands/gold-markets.
60 Sydney Freedberg et al., “How Africa’s Richest Woman Exploited Family Ties, Shell Companies and Inside Deals to Build an Empire,” International Consortium of Investigative Journalists, January 19, 2020, https://www.icij.org/investigations/luanda-leaks/how-africas-richest-woman-exploited-family-ties-shell-companies-and-inside-deals-to-build-an-empire/.
61 Michael Forsythe, Gilberto Neto, and Megan Specia, “Africa’s Richest Woman Set to Face Charges in Angola Over Embezzlement,” New York Times, January 23, 2020, https://www.nytimes.com/2020/01/23/world/africa/angola-santos-embezzlement.html. Isabel dos Santos has also begun the process of assuming Russian citizenship, according to those same documents. Miguel Prado, “Isabel Dos Santos Muda-Se Para o Dubai, Um Novo Paraíso Fiscal,” Jornal Expresso, January 3, 2020, https://expresso.pt/economia/2020-01-03-Isabel-dos-Santos-muda-se-para-o-Dubai-um-novo-paraiso-fiscal.
62 Forsythe, Neto, and Specia, “Africa’s Richest Woman Set to Face Charges in Angola Over Embezzlement.”
63 “Guns, Pirates and Charcoal,” Global Initiative (blog), December 18, 2018, https://globalinitiative.net/somalia_untocwatch/.
64 Corina Pons and Mayela Armas, “Venezuela Plans to Fly Central Bank Gold Reserves to UAE,” Reuters, January 31, 2019, https://www.reuters.com/article/us-venezuela-politics-gold-exclusive-idUSKCN1PP2QR; Melendez and Boon, “How Venezuela’s Stolen Gold Ended Up in Turkey, Uganda and Beyond,” InSight Crime, March 21, 2019, https://www.insightcrime.org/news/analysis/venezuelas-stolen-gold-ended-turkey-uganda-beyond/; and Pamela Kalkman, “These Are the Refineries Processing Venezuela’s ‘Blood Gold’ —and Helping Maduro Stay in Power,” Miami Herald, July 23, 2019, https://www.miamiherald.com/news/nation-world/world/americas/venezuela/article232452267.html.
65 Pons and Armas, “Venezuela Plans to Fly Central Bank Gold Reserves to UAE”; and Kalkman, “These Are the Refineries Processing Venezuela’s ‘Blood Gold’ —and Helping Maduro Stay in Power.”
66 Sandcastles: Tracing Sanctions Evasion Through Dubai’s Luxury Real Estate Market, 17–21.