Pandora Papers reveal Emirati royal families’ role in secret money flows

Dubai (city) | Geography, Creek, & History | Britannica

From skyscrapers rising in the desert to free-trade zones hawking gold and diamonds, the UAE is open for business. Sometimes that business involves shadowy companies and international crimes.

DUBAI, United Arab Emirates — The glass-and-steel office towers and luxury hotels along Sheikh Zayed Road are glittering reminders of Dubai’s rise from a cluster of settlements to what’s been called “one of the urban miracles of the modern world” — “a futuristic city rising in the middle of a desert.”

Today, this major traffic artery, named after the United Arab Emirates’ first president, is home to the regional headquarters of General Motors, Shell and other global giants attracted by the Persian Gulf nation’s reputation for stability and its open-for-business attitude.

At the prestigious address of 1 Sheikh Zayed Road, on the 16th floor of the H Hotel Office Tower, is an office that was the birthplace of a constellation of lesser-known firms — scores of offshore companies sold to clients who prefer to keep their identities under cover.

The Pandora Papers, a trove of secret records obtained by the International Consortium of Investigative Journalists, reveal that the real owners of these companies include a raft of shady players in the offshore world.

Among them: A Belgian tycoon accused of profiting from the smuggling of “conflict gold” ripped from violence-torn regions of the Democratic Republic of Congo. An internet mogul from Quebec convicted in the United States of money laundering that authorities said shifted $250 million for fraudsters, child porn traffickers and other criminals. A 26-year-old crime kingpin whose “dark web” internet site peddled guns, stolen financial information, counterfeit documents, toxic chemicals and huge quantities of illegal drugs — including heroin and fentanyl linked to overdose deaths across the U.S.

The story of the offshore companies created within Dubai’s corporate enclave casts fresh light on Dubai’s rise as one of the world’s financial capitals— and on the UAE’s role as a nexus for money laundering and other financial crimes.

The UAE is home to a thriving trade in financial secrecy. It offers shell companies that mask their real owners’ identities; dozens of internal free-trade zones that provide even more shadows for them to hide in; and a regulatory system known for what anti-corruption advocates call its “ask-no-questions, see-no-evil approach” to dealing with money tied to gold smuggling, arms trafficking and other crimes.

“The UAE provides secrecy, complexity and control,” Graham Barrow, a money laundering expert and co-host of The Dark Money Files podcast, told ICIJ. “It’s a perfect storm. An invitation to criminals to make the most of it.”

The UAE is a confederation of seven sheikdoms — emirates — that gained independence from Britain and joined together half a century ago under the leadership of its first president and the namesake of Sheikh Zayed Road, the late Sheikh Zayed bin Sultan Al Nahyan.

Members of the six royal families that govern the seven emirates have a hand in almost every business activity in the UAE — as landlords of office towers and other properties, as owners of major corporations, as silent partners who take a share of the profits in other enterprises and as public officials overseeing sovereign funds and government-owned businesses.  And, in turn, the emirates’ rulers decide who will serve as regulators overseeing businesses that they and their families may profit from.

Map of the United Arab Emirates
The United Arab Emirates is located on the Persian Gulf at the eastern end of the Arabian Peninsula.

Offshore sheikhs

The more than 11.9 million files in the Pandora Papers include some 190,000 confidential files from SFM Corporate Services, a UAE-based firm that has billed itself as “the World’s #1 Offshore Company Formation Provider.” SFM is one of thousands of firms in the Emirates that help clients incorporate companies, including hard-to-track companies for people living and doing business outside of the UAE. These company formation providers are part of a global web of lawyers, accountants and other operatives who make the offshore financial system possible.

ICIJ’s review identified the owners of at least 2,977 companies in the UAE, the British Virgin Islands and other offshore financial centers that were incorporated with SFM’s help or received other services from SFM. The owners of these companies include the Belgian gold tycoon, the internet mogul, the dark web impressario and more than 20 other people accused of financial crimes and other wrongdoing around the world, ICIJ research found.

SFM said in a statement that it operates in a manner that is “absolutely legal in every aspect. SFM abides by the applicable laws and regulations in every jurisdiction it operates in.”

For several years, SFM operated out of an office on 16th floor of the H Hotel tower at 1 Sheikh Zayed Road, a building that ICIJ research indicates is owned by Sheikh Hazza bin Zayed Al Nahyan, the UAE’s former national security adviser and brother of Sheikh Mohammed bin Zayed, the crown prince of the emirate of Abu Dhabi and next in line to become UAE president.

Sheikh Hazza did not reply to questions that ICIJ sent to him via the UAE Embassy in Washington and the Abu Dhabi Executive Council media office.

Along with internal records from SFM, the Pandora Papers include tens of thousands of additional files related to the UAE, including documents from Seychelles and other jurisdictions that reveal offshore holdings of at least 35 members of the UAE’s ruling families.

Heavyweight Emirati royals with offshore holdings revealed in the data include Sheikh Hazza; his successor as national security adviser, his brother Sheikh Tahnoon bin Zayed; and the UAE’s prime minister and ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum.

UAE's Sheikhs Tahnoon, Hazza and Maktoum
From left, Sheikh Tahnoon bin Zayed, Sheikh Hazza bin Zayed Al Nahyan and Sheikh Mohammed bin Rashid Al Maktoum. Image: Getty Images

The files show that the prime minister is connected — via two companies in the British Virgin Islands — to the founder of Dark Matter, a UAE-based cybersecurity firm that has been accused of spying on human rights activists and government officials in multiple countries.

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