The FATF’s Mutual Evaluation Report of the UAE issued in April 2020 stated that, as the UAE is a cash-intensive economy and plays an important part in global trade, there are significant risks associated with the cross-border movement of cash and bearer negotiable instruments, including bulk-cash smuggling that is associated with third-party money laundering risks.

As a major medium of exchange in the UAE, cash is particularly vulnerable to abuse by illicit actors to conduct money laundering activities and finance criminal activities. The specific characteristics of cash-anonymity, interchangeability, and transportability—make it an attractive method by illicit actors seeking to conceal the proceeds of crime. Unlike other monetary instruments, such as credit cards or wire transfers, cash holds no record of its source or owner, and can be easily concealed in large quantities upon which it is difficult to trace once spent. Cash transactions are also instantaneous and widely accepted across jurisdictions.

Criminal activity—or a predicate offense—is often cash based. A predicate offense for money laundering is the underlying criminal activity that generates proceeds. Criminals then seek to “launder” these illicit proceeds, which leads to the offense of money laundering. The FATF Recommendations identify “designated categories of offenses”² as the following:

However, as the FATF expects countries to include the above-mentioned list at the minimum, the UAE’s definition of Predicate Offense is broader to include any act constituting a felony or misdemeanor under the applicable laws of the UAE, whether this act is committed inside or outside the UAE when such act is punishable in both countries.

² Available at https://www.fatf-gafi.org/glossary/d-i/