"Cities" and havens for hiding suspicious money

The Network for the Affirmation of the Non-Governmental Sector (MANS) has warned that members of the ruling families of the United Arab Emirates (UAE) are directly linked to the formation and management of a network of almost 3.000 offshore companies, used to conceal identities, assets and cash flows around the world, including users accused of money laundering, arms and drug trafficking, and financing cybercrime.

They emphasize that these findings were published in 2021 by the International Consortium of Investigative Journalists (ICIJ) as part of the global Pandora Papers investigation, which exposes the UAE's institutional role in the legalization of dubious capital.

"Despite this, the Government of Montenegro signed an agreement with the UAE without a public debate, which enables the implementation of investments without tenders, control of the origin of money and adequate mechanisms for protecting the public interest. Although the Prime Minister Milojko Spajic claims that 'all procedures, including those for the prevention of money laundering, will be implemented', the content of the Agreement does not provide for transparent mechanisms for partner selection, capital verification or the participation of competent institutions in decision-making. In addition, the European Commission, in its latest report, clearly pointed out the shortcomings in the fight against money laundering and the institutional weakness of the Montenegrin judiciary in financial investigations," MANS told "Vijesti".

This NGO again called on MPs not to support the Law on Ratifying the Agreement on Cooperation in the Field of Tourism and Real Estate Development between the Government of Montenegro and the Government of the UAE.

This Law was recently adopted by the Parliament of Montenegro, but the President Jakov Milatovic refused to sign it. He returned the regulation to the Parliament for reconsideration, emphasizing that the Agreement “practically represents a unilaterally binding act that stipulates a series of obligations for the state of Montenegro, while it does not contain any specific obligation of the other party that would ensure the protection of the interests of our state in this legal matter”. With this approach, Milatović explained, the Government has “put the state of Montenegro in an unequal position in relation to the other contracting party, according to the explanation”.

Spajić and Deputy Prime Minister of the UAE Government and Minister of Foreign Affairs Sheikh Abdullah Bin Zayed Al Nahyan, in the presence of the president sheikh Mohammed bin Zayed Al Nahyan. The agreements were signed at the end of March this year.

Pandora papers and Emirati offshore networks

At the center of the offshore network, MANS points out, is the Dubai-based company "SFM Corporate Services", which advertised itself as "the world's largest provider of offshore company formation services."

They point out that SFM helped establish or manage at least 2.977 companies registered in the UAE, the British Virgin Islands and other jurisdictions known for their business secrecy. The company's offices, MANS recalls, citing ICIJ data, were located in the "H Hotel Tower" on Sheikh Zayed Road, a building associated with the sheikh Hazrat bin Zayed Al Nahyan, former UAE National Security Advisor.

"According to the findings of the Pandora Papers, SFM clients included individuals accused of some of the most serious financial and criminal offenses: a Belgian tycoon accused of smuggling 'blood gold' from Africa, a Canadian internet entrepreneur convicted of laundering $250 million, and the administrator of a dark web site that sold weapons, drugs and forged documents. These activities confirm that the UAE has become a new global hub for concealing suspicious financial activities," MANS emphasizes.

The NGO recalls that a consortium of investigative journalists attempted to send questions to Haza in 2021, through the UAE Embassy in Washington and the media office of the Abu Dhabi Executive Council, but they were not answered.

A lawyer for the company, SFM Corporate Services, told ICIJ that the firm “routinely refuses to cooperate with clients” when it finds negative information about their past. He added that SFM does “necessary due diligence” when setting up a new company for clients, but “of course it is not in a position to search for news from all over the world.”

MANS also points out that the Pandora papers indicate that "in addition to Haza, Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai and prime minister of the UAE, was also actively involved in secret financial arrangements”.

"Pandora's papers show that he was a shareholder in three offshore companies - Tandem Investco Limited and Tandem DirectorCo Limited, registered in the British Virgin Islands, and Allied International Investments Limited from the Bahamas - through Axiom Limited, which is partly owned by his investment conglomerate Dubai Holding. These companies were established in 2008 with the aim of international expansion of the business of Axiom Limited, a manufacturer and retailer of mobile phones," MANS explains.

They specify that the Bahamian company is currently suspended, but not liquidated, while two companies from the British Virgin Islands have already been closed.

These offshore structures have been managed since 2011 by Faisal Al Banai, a prominent Emirati leader in cyber technologies, who was also a shareholder of Axiom Limited.

Faisal Al Banai is particularly known for running the company “DarkMatter,” which Reuters revealed in 2019 had worked closely with the UAE government on controversial cyber surveillance programs, including spying operations on American citizens with the help of former US intelligence operatives. While Al Banai acknowledges DarkMatter’s close ties to the state, he has denied involvement in state hacking programs.

According to a 2021 ICIJ report, Sheikh Mohammed bin Rashid Al Maktoum also did not answer questions from investigative journalists.

Incompatibility with the Constitution of Montenegro and EU law

MANS reminds that the European Parliament rapporteur for Montenegro Marjan Sharec recently warned that certain points of the Agreement with the UAE “do not indicate compliance with the EU legal order”.

"He particularly emphasized those related to exemption from public procurement and adapting legislation to the interests of individual investors," MANS said.

They called on MPs to reject the Law on Ratifying the Agreement with the UAE.

"And do not allow Montenegro to become a platform for the legalization of international suspicious capital. The protection of public interest, legality and European values ​​must remain the priority of those elected by citizens to represent them," said MANS.

On April 22, 46 MPs voted in favor of the Law on Ratification of the Agreement on Cooperation in the Field of Tourism, 10 voted against, and four abstained. The agreement was supported by MPs from the ruling coalition, except Milan Knežević, Dragan Bojović, Jelena Kljajević i Vladislav Bojović who abstained. The deputies of the Civic Movement URA and minority parties, except the Bosniak Party, voted against.

The NGO Action for Human Rights announced that the Constitution of Montenegro stipulates that laws regulating the property rights of foreigners must be passed by a two-thirds majority of all deputies in the Parliament of Montenegro, which means that at least 54 votes are required for their adoption.

That NGO announced that it would submit an initiative to review the constitutionality of the process of adopting that law, if it enters into force.

A similar position is held by the Association of Lawyers of Montenegro, which two days ago called on the Legislative and Constitutional Committee of the Parliament to reconvene and consider all the facts.