Opinion | Beware the UAE’s Financial

Corruption
Normalization with Israel has made the UAE's ambitions to become a global financial hub
closer than ever, but expansive reforms to its financial and judicial systems must come for
this to be realized

The United Arab Emirates is hoping that, among other benefits, the agreement to normalize
its relations with Israel will bring succour to the Gulf nation’s economy, hit hard by declining
oil revenues and the coronavirus pandemic.

Indeed, Emirati Economy Minister Abdulla bin Touq Al-Mari is expecting as much as $550
million in new business deals for the UAE as a result of the peace deal, including through
joint Israel-UAE solar power projects as the country seeks to reduce its dependence on the oil
sector.

Al-Mari has good reason to be hopeful that the deal may usher in a fresh wave of prosperity
for the Emirates and Israel alike.

With the agreement, the UAE has certainly created many new economic opportunities and
diversified its trade partners away from the Arab world, not to mention currying favor with
Washington.

At the same time, the recent FinCEN leaks have only confirmed that the UAE still has
significant shortcomings regarding the robustness of its financial good governance which
could serve as a dealbreaker for potential partners in Israel.

Indeed, much of the Israel-UAE accord’s long-term success will depend on the Emirates’
willingness to genuinely reform its financial and legal frameworks so that it can become a
global financial hub in the post-oil era without allowing corruption and illicit funds to
besmirch its reputation.

As the recent FinCEN leaks have illustrated, however, the UAE’s booming business sphere
has taken off in part due to a willingness to turn a blind eye to problematic financial flows.
According to the BBC, the cache of documents showed that the UAE’s central bank failed to
act on warnings that a Dubai-based firm, Gunes General Trading, was helping Iran evade
sanctions.