FATF Removes UAE from ‘Grey List’ Due to Major Reforms Progress

After making significant progress in implementing reforms, the United Arab Emirates has been removed from the “grey list” of the Financial Action Task Force (FATF), the global organization focused on combating money laundering (ML) and terrorism financing (TF). 

After conducting a thorough on-site assessment of the 2nd largest economy in the Arab world, the decision was made to remove the UAE from the increased monitoring list of the Paris-based watchdog. The country was added to the grey list during the year 2022. 

In Paris, at the end of its three-day meeting session, the Financial Action Task Force (FATF) stated that Uganda, Gibraltar, and Barbados are the three other jurisdictions that have been removed from the grey list. 

Sheikh Abdullah bin Zayed, serving as both the Minister of Foreign Affairs and the Chairman of the Higher Committee overseeing the National Strategy on AML and CFT. He positively acknowledged the initiative and expressed his appreciation to the individuals who contributed to its realization.   

“This achievement is the result of substantial and commendable collaboration among relevant ministries, the federal government, and local entities,” he stated. 

“These combined efforts contribute to the acceleration of the national strategy and action plan, fulfilling the directives as well as ambitions of the United Arab Emirates’ leadership. The ultimate goal is to enhance the country’s prominent standing, competitiveness, and global positioning as a hub for the economy, trade, and investment.” 

Minister of Economy Abdulla bin Touq emphasized, “Strengthening the efficacy of our national system in combating money laundering (ML) and terrorism financing (TF) is crucial for enhancing the UAE’s reputation as a global center for investment and trade.” 

Several Cabinet ministers shared their comments on the announcement made on Friday. The Abu Dhabi Global Market and the Abu Dhabi Department of Economic Development, among others, also expressed their approval of the announcement. 

The task force stated on Friday that during their mutual evaluations, Gibraltar, Barbados, Uganda, and the UAE have made notable progress in addressing the strategic deficiencies in AML/CFT measures. The FATF meeting praised their substantial progress. 

“These jurisdictions have agreed to implement a plan of action to promptly address the identified strategic weaknesses within specified time frames. As a result, these nations will no longer be under the FATF’s enhanced monitoring procedure.” 

Each jurisdiction will maintain its cooperation with the respective FATF-style regional organization to which it belongs, as stated by the FATF. The United Arab Emirates, in collaboration with three other nations, has closely worked with Financial Action Task Force to establish compliance measures as well as enhance monitoring ahead of the review. It was added that they will further enhance their AML, CFT, and CPF frameworks. 

During its plenary meeting in October, the task force announced that the UAE has taken significant steps in line with its action plan. The country has been approved for an on-site inspection, together with the three other jurisdictions. 

The visit, which represents the last step before being removed from the grey list, involved assessing the AML/CFT reforms as well as their enforcement, and the authorities’ dedication to ensuring ongoing implementation of those initiatives in the future. 

The United Arab Emirates has implemented anti-money laundering and combating the financing of terrorism (AML/CFT) reforms as outlined in the Financial Action Task Force action plan. These reforms encompass measures aiding money-laundering (ML) investigations, the application of sanctions for non-compliance at financial institutions, and a rise in prosecutions to prevent money laundering. 

During its most recent plenary meeting, FATF included Namibia and Kenya in the list of jurisdictions that will undergo enhanced monitoring. Established in 1989, the FATF is an organization formed by G7 economies. It serves as a global leader in combating money laundering, terrorism financing, and proliferation financing. The 39-member organization establishes global standards to empower national authorities in effectively controlling funds associated with drug trafficking, cyber fraud, illicit arms trade, and other significant crimes. 

Over 200 jurisdictions and countries have made a commitment to adopt the standards set by the FATF. These standards undergo evaluation with the support of nine organizations affiliated with FATF as Associate Members, along with other global partners like the World Bank and IMF. 

Over the past few years, the UAE has achieved noteworthy advancements in addressing money laundering, weapons proliferation, and financing of terrorism. This progress has been made possible through the implementation of rigorous laws and the issuance of various regulations aimed at combatting financial crime. 

The establishment of the Executive Office of AML and CFT in February 2021 aimed to supervise the implementation of the UAE’s National Action Plan and National AML/CFT Strategy. 

Functioning primarily as a national policy entity, the Executive Office holds a broad mandate to establish and maintain a durable and resilient AML/CFT framework in the UAE, ensuring originality and effectiveness. 

According to an earlier interview with Hamid Al Zaabi, the Director General of the Executive Office, it collaborates with over 80 government entities and law enforcement organizations within the country to facilitate compliance. 

Between March and mid-July 2023, the UAE increased its actions to stop money laundering as well as terrorism financing, leading to taking away and giving up assets worth more than 1.3 billion dirhams (354 million dollars). 

In the initial half of last year, the Emirates imposed fines amounting to 199 million dirhams to stop money laundering. This was more than the total fines in 2022 (76.2 million dirhams), 2020 (8.4 million dirhams), and 2019 (800,000 dirhams) combined, as reported in September by Wam, the state news agency, with information from Mr. Al Zaabi. 

At that moment, he expressed the UAE’s unwavering dedication to further developing its “long-term, sustainable capabilities in anti-money laundering and countering the financing of terrorism (AML/CFT). The goal is to enhance the ability to investigate, detect, and comprehend instances of money laundering (ML) and terrorist financing (TF), and the country remains committed to expanding its collaboration on an international scale.”