Last year’s terrorist attacks in Paris and San Bernardino, California, are complicating efforts by the Federal Reserve to resume shipments of US dollars to the UAE according to an article in the Wall Street Journal (WSJ).

It says that the US authorities quietly halted regular shipments of hundreds of millions of US dollars to the UAE central bank about three years ago due to concerns that cash was falling into the hands of sanctioned Iranian banks.

Trade finance focus

Citing US officials and people familiar with the matter, the WSJ says US officials about a year ago entered into talks with UAE representatives to resume US dollar shipments, but the two sides have yet to reach an agreement.

The UAE has been asked by US officials to share more information about how US dollars move through its central bank and are distributed to other financial firms in the region, particularly through trade finance.

Heightened concerns

US officials have declined to talk about how the recent atrocities in France and the US specifically affected the talks, but the attacks have reportedly raised fresh questions about how terrorist groups are financed.

While US officials have previously praised the UAE’s commitment to stopping illicit financing, Western officials in recent months have escalated calls for the oil-rich Gulf monarchies to crack down on their citizens who might provide support to extremist groups.

The Wall Street Journal article, Terrorist Attacks Stall Fed’s Shipments of Dollars to the Gulf can be found here.

Categories: Trade Based Financial crimes News