Dubbed the “Dubai leaks”, the report authors say they have evidence that profits from Syrian conflict finance, Mexican narcotics trafficking and Iranian nuclear proliferation are being used to buy property in the UAE – often through offshore vehicles.
The leak has been used to identify 44 properties worth $28.2m (£21m, €23.8m) “directly associated” with individuals named in US sanctions and a further 37 properties worth $78.8m connected to them via their networks.
The report, Sandcastles: Tracing Sanctions Evasion Through Dubai’s Luxury Real Estate Market, is the result of a year-long study of unnamed sources of data within Dubai’s property industry which analysts corroborated using open source information on the housing market.
According to the analysis conducted by the Centre for Advanced Defence Studies (C4ADS), it has exposed “expansive corporate networks” which use other jurisdictions including the US, the British Virgin Islands, Hong Kong, Romania and Mexico to disguise the true ownership.
Counter measures
“While the UAE has taken steps to address this issue, its response thus far has failed to fully confront the underlying drivers enabling the manipulation of its real estate market,” says C4ADS.
On 10 May, the US Treasury said it worked with the UAE to disrupt a money changing operation run by a branch of Iran’s armed forces, the Iranian Revolutionary Guard.
The report authors acknowledge that Dubai is not the only market of concern.
They also cite a 2015 Transparency International survey which estimated that £180m worth of suspect transactions in London, of which 75% used shell companies.
C4ADS hopes the report will be used to strengthen sanctions and improve anti-money laundering measures including:
- the same know your customer anti money laundering measures applied in banking used in property;
- enhanced profile checks on those using shell companies to own properties
- and consistent enforcement of existing rules.
C4ADS is a Washington-based non-profit organisation which uses data analysis applied to global conflict and transnational security issues.
