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DUBAI, Nov. 9 (Reuters) – Kuwaiti prosecutors have asked Dubai to release $ 500 million for a Kuwaiti direct investment fund stalled as part of a money laundering investigation. money, said a letter from Reuters.
The funds, deposited in a Dubai-based bank, were frozen at the request of the Central Bank of the United Arab Emirates in November 2017, according to a source familiar with the case, legal documents and correspondence exchanged between the parties involved in the case. Case reviewed by Reuters.
A senior UAE official said the investigation, which had not yet been announced, had been conducted by the Dubai authorities to determine whether funds sent by a Philippine bank to a Kuwaiti direct investment account in Dubai were related to money laundering.
The investigation comes as the United Arab Emirates tighten the financial rules in an effort to erase the perception of some foreign investors from a home of illicit funds from its free trade areas and the proximity to Iran, which is subject to US sanctions.
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But freezing of funds, which, according to Kuwait, is partly due to two of its government entities, could test the relationship with regional ally Dubai, which did not reveal the cause of the investigation on money laundering.
In a letter dated October 16, the Kuwaiti Attorney General asked his counterpart in Dubai to help release the money.
The letter stated that two local government entities, the country's port authority and its pension fund, were entitled to a total of about $ 200 million.
The Kuwaiti letter requested cooperation for the release of funds, the transfer of $ 125 million to the account of the Kuwait Ports Corporation and $ 79.2 million to the account of the General Organization of Social Security.
Both entities are investors in the Port Vand Fund, a Cayman Islands-registered direct investment fund.
The Kuwaiti Attorney General said the remaining frozen funds would be distributed to other rights holders without naming them.
The Kuwaiti prosecutor's office has not responded to Reuters' request to comment on the contents of the letter.
A spokeswoman for the Dubai government confirmed that Noor Bank's frozen fund investigation was continuing. Asked about the Kuwaiti Attorney General's request to release the funds, the spokeswoman said the government did not wish to make further comments on the matter.
Dubai authorities are investigating the initial transfer of $ 500 million to an account belonging to Port Link, which operates Port Vand, to Noor Bank, based in Dubai, according to a July 2011 letter sent by the governor of the Central Bank of Dubai. United Arab Emirates to the country's ambassador to the United States.
The letter, also seen by Reuters, indicated that the case involved money laundering offenses involving people in Kuwait suspected of being involved in misappropriation of public funds and corruption.
The letter did not name any of these persons and did not provide details of the allegations.
At the time, Nyabata Dubai and Kuwait were in touch to investigate the legality of the agreement, she said.
The US law firm Carroll and Moring, a representative of Port Vand, told Reuters that the money was a legitimate payment after Port Vand sold its investments in the Philippines.
The amount of $ 496 million from November 14, 2017 from BDO Bank or Unibank in the Philippines has been transferred to the Portlink account in Dubai, according to a bank match between Philippine Bank and Citibank, American in the conversion process, which was also seen by Reuters.
"The agreement is legitimate and respects all banking rules," BDO said in a statement. A spokesman for Citi declined to comment.
"The bank is committed to the highest standards of compliance, governance and internal control," said Noor Bank spokeswoman Susan Shore.
(Prepared by Abdel Moneim Darrar for the Arab Bulletin – Edit Mohamed Al Yamani)
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