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The economic secretary of the UK recently stated (April 25th, 2023) that the United Arab Emirates must demonstrate its effectiveness and enforcement of policies in combating financial crime before it can be removed from the grey list maintained by the global watchdog FATF.
A jurisdiction under increased monitoring, or FATF greylist, needs more strategic proficiency in preventing financial crime. FATF’s greylist identifies countries with a high risk of illegal and suspicious financial transactions, money laundering, and terrorist financing. Nevertheless, they have committed to improving the regulatory infrastructure to mitigate financial crimes.
In just over a year, the Financial Action Task Force (FATF) included the United Arab Emirates on its “grey list” of countries subject to increased monitoring. As a response, the UAE expressed its commitment to improving cooperation with FATF.
Whilst addressing the City Week conference in London on the sidelines, Economy Minister Abdullah bin Touq Al Marri stated, “We have addressed many challenges. But what needs to be seen now is a lot of effectiveness, which comes with time.”
According to Marri, approximately 58 initial concerns of the UAE have been addressed, whilst only 15 are left and, with time, will be effectively remediated.
“We’ve managed to close a couple of (them), and I think there are more to come in the next couple of months,” added Mari to the statement.
As an oil and gas exporter with a reputation for openness to foreign investors, the UAE has tightened its regulations to overcome an image as a financial hub for illicit activity.
FATF stated in February that the UAE had demonstrated significant progress, particularly in its cooperation with other countries in the case of investigations.
According to FATF’s 2020 evaluation, “fundamental and major improvements” are needed, especially in anti-money laundering investigations on an international basis, risk management in real estate, precious stones, and metals, and the detection of suspicious transactions.
Marri says a date for the UAE’s removal from the list cannot be predicted at this point.
It is anticipated that the FATF will need to travel to the UAE during the process. As soon as that occurred, Marri stated that he was “very sure” that the country would be removed from the list.
“We’re on track… there is a high leadership follow-up on the topic. We meet on a weekly basis,” he explained, noting that many steps have been taken to date, including improved training in the private sector.
Following the passage of a law in 2018, the United Arab Emirates established an Executive Office for Anti-Money Laundering and Counter Financing Terrorism (AML/CFT) in 2021.