UAE Is Removed From The FATF Grey List As A Victory For The Country

UAE Removed From Financial Crime Watch List, The Win To Celebrate

On February 23, 2024, UAE was removed from the Grey List of FATF, a list also known as jurisdiction under enhanced monitoring, which contains countries that are diligently working with FATF to ensure their strategic deficiencies addressed as money laundering, combating the financing of terrorism, and proliferation financing programs.

The Financial Action Task Force, a Paris-based intergovernmental body that develops the standards for anti-money-laundering legislation and monitors nations’ ability to prevent, detect, and conceal illicit financial flows – has noticed that in recent years the U.A.E. has paid more attention to the quality of its financial intelligence to detect criminal and financial crimes.

The FATF also applauded the U.A.E’s efforts in developing improved measures to guarantee the transparency of beneficial ownership of legal entities, citing this as a way of protecting them from being misused.

Background Of Being Grey Listed

Due to its key geographic location in the Gulf, the UAE in the past decades has aimed at connecting Europe and Asia through the development of financial, trade, and travel hubs.

In the year 2022, under the microscope of the financial task force, the oil-rich Gulf country that holds the status of millionaires, bankers, and hedge funds, was put under the spotlight of scrutiny of the high-risk countries, where the funds laundering operations can be considered.

On 4th March 2022, the United Arab Emirates is included in the Grey List. The UAE was demanded to have complied with all FATF recommendations that were mentioned in its action plan as well, which was issued immediately following the UAE’s Mutual Evaluation in 2020.

UAE Under Enhanced Monitoring In 2024

As part of its risk-based approach, the UAE’s financial services regulators have demonstrated some proactive investigations to identify money laundering and have taken enforcement actions accordingly. From the ground, it has enforcement cases that are very abundant concerning AML breaches.

The FATF acknowledged the range of changes the UAE has made since being placed on the grey list, such as:

• The creation of an Executive Office in opposition to ML/TF.
• New AML/CFT regulations are being adopted by FIs and DNFBPs.
• Forming a specialized court to address financial crimes.
• The implementation of a new penal code to reinforce the UAE’s anti-corruption, anti-bribery, and money laundering laws.

UAE foreign minister- Sheikh Abdullah bin Zayed Al Nahyan, reaffirmed the decision of the FATF stating that the change will “bolster the country’s leading position and competitiveness, and will further accelerate its position as an economic, trading and investment center that will help drawing more customers internationally”, according to WAM, the UAE News Agency.

“Stopping the illegitimate money flows and the improvement of the effective National Strategy for Combating Money laundering and Terrorism financing tasks are basic for building the UAE’s image as a prime economic hub for local, regional, and international businesses”, Abdullah bin Touq Al-Marri, the Minister of Economy, stated.

Repercussions Of The UAE Leaving The FATF Grey List

On Friday, the FATF President, T. Raja Kumar, said at a press conference, “Exiting the grey list doesn’t mean that U.A.E. all of a sudden has a perfect system, but with a commitment to continue its excellent progress in enhancing the (AML/CFT) system, I wish U.A.E. the best of luck in this virtuous endeavor.”

FATF on Friday also removed Barbados, Gibraltar, and Uganda from the grey list for enhanced control.

“During the process, they all were taking new security measures to update the systems that protect against money laundering and terrorism financing which allows them to do proposed action plans”, said T. Raja Kumar.

In the FATF plenary meeting Kenya and Namibia were added to the list of nations that needed closer observation.

The UAE’s measures include, amongst others, expanding financial investigations and prosecutions, improving international cooperation, and harmonizing virtual asset regulation with international norms.

This marks a milestone in the ongoing FATF effort to recognize the UAE’s continuous AML/CFT framework improvement. This is an especially important factor as UAE is an important financial center and trade hub both globally and regionally, thus its removal from the grey list is a critical step.