Patterns of Abusing Financial Institutions in "Drug Trafficking and Laundering its Proceeds"

The UAEFIU concluded this report in line with the UAE’s efforts to combat drug trafficking and money laundering, including the UAE national campaign launched in May 2023 by His Highness Lt. General Sheikh Saif bin Zayed Al Nahyan, Deputy Prime Minister of the United Arab Emirates and Minister of Interior, to fight illegal drug promotion and trafficking under the slogan “Join us to stop it”.

The report addresses different elements and attributes associated with the abuse of narcotics and psychotropic substances involving financial institutions. It identifies the most common patterns and trends of how financial institutions are abused in transacting funds associated with the illicit narcotics trade. Moreover, it highlights different examples of how the proceeds of drug trafficking could be laundered in the UAE.

This report scope also develops an understanding of how financial institutions in the UAE are misused in the growing trend of drug trafficking through social media platforms, and highlights different observations related to the potential employment of virtual assets in drug trafficking and laundering its proceeds.

The following typologies and their associated risk indicators constitute the key findings of the analysis, wherein risk mitigation is required:

1. Abusing the banking sector in drug trafficking and money laundering.
2. Abusing the money services businesses (MSBs) in drug trafficking and money laundering.
3. Misusing legal persons in drug trafficking and money laundering.
4. Employing trade-based money laundering (TBML) techniques in drug trafficking and laundering the proceeds of illicit drugs.
5. Abusing the real estate sector in laundering the proceeds of drug trafficking.
6. Employing virtual assets in drug trafficking and money laundering.

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