ReutersDUBAI (Reuters) — Dubai’s ruler has resisted efforts by Kuwait to release nearly $500 million in frozen funds at the heart of a money laundering probe straining relations between the two Gulf allies, according to correspondence seen by Reuters.
The investigation is taking place as the United Arab Emirates tightens financial regulations to fight a perception that it is a hot spot for illicit money flows owing to its free trade zones and proximity to Iran, the target of U.S. sanctions.
The frozen funds belong in part to the Kuwait government and have been frozen at Dubai’s state-owned Noor Bank since late 2017, when the emirate’s public prosecutor, in collaboration with Kuwait’s prosecutors, started probing the lawfulness of their transfer to Dubai from the Philippines. Executives involved deny wrongdoing.
“I am fully confident the joint efforts of Kuwait’s Public Prosecutor Office and Dubai’s Public Prosecutor Office will result in fair solutions to this case and utilize the legal system to address damages incurred by shareholders,” Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum said in a letter dated Nov. 3.
He was responding to a letter from Kuwaiti Prime Minister Sheikh Jaber al-Mubarak al-Hamad al-Sabah in September asking for help to release the funds.
“In light of the severe damages to government agencies and other investors due to the continued freeze on these funds, we ask your highness to direct your relevant entities to swiftly release the funds,” Sheikh Jaber had written.Speech