The Financial Action Task Force said the UAE had made “significant progress” to strengthen its anti-money laundering controls including by demonstrating increased and swifter action against financial criminals.
In a statement on Friday, following the conclusion of its meetings in Paris, the global money laundering and terrorist financing watchdog confirmed there would be “increased monitoring” of the UAE’s implementation of its action plan to counter money laundering and terror financing. The increased monitoring regime is referred to as the FATF ‘grey list’.
On Friday, FATF said the UAE had “made a high-level political commitment” to work with the organisation “to strengthen the effectiveness” of its anti-money laundering and counter terror financing efforts.
The UAE’s Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism said, via state news agency Wam on Friday, the country takes “its role in protecting the integrity of the global financial system extremely seriously”.
The UAE “will work closely with the FATF to quickly remedy the areas of improvement identified”, it said.
“On this basis, the UAE will continue its ongoing efforts to identify, disrupt and punish criminals and illicit financial networks in line with FATF’s findings and the UAE’s National Action Plan, as well as through close coordination with our international partners," the office said.
According to FATF, the action plan consists of seven points such as increasing international assistance to help with investigations, stepping up prosecutions and raising awareness in the private sector about sanctions evasion.
Other jurisdictions under increased monitoring include Albania, the Cayman Islands, Morocco, Panama and Pakistan.
“When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring,” the organisation said on Friday.
FATF is an inter-governmental organisation created by the G7 nations in 1989.
In practice, the inclusion of a country on FATF’s grey list can result in increased compliance costs for financial institutions. It can potentially impact levels of foreign direct investment in some cases, although UAE officials have said they are confident the robustness of its financial system and resilience of economy will mean it continues to attract higher levels of capital.
The UAE has in recent months expanded its efforts to tackle money laundering and terror financing risks. The Executive Office of Anti-Money Laundering and Counter Terrorism Financing, which was established a year ago, has said UAE authorities have confiscated Dh2.33bn as part of an intensive clamp down on financial crime.
The Ministry of Economy set up an anti-money laundering department while a court was established in Abu Dhabi to tackle money laundering and tax evasion.
The UAE Central Bank last year also instructed all hawala providers – informal fund transfer agents operating outside the banking system – to register with the regulator to strengthen oversight of money transfers.
The UAE has also increased levels of international co-operation such as in September when it agreed a partnership with the UK to tackle illicit financial flows.
There are also plans announced to introduce a Federal corporate tax regime from June 2023.
