UAE dropped from global watchdog’s illicit finance list in quick turnaround

The United Arab Emirates (UAE) on Friday was removed from a global financial watchdog’s “grey list” for countries that had not done enough to combat money laundering and terrorist financing, in a rapid turnaround less than two years after the Gulf country was added to it.

At the end of its three-day plenary meeting in Paris, the Financial Action Task Force (FATF) said it had removed the UAE from the list as it had strengthened its financial system’s anti-money laundering (AML) and counterterrorist financing (CFT) capabilities. 

The Paris-based watchdog said the Arab world’s second-largest economy would no longer be subject to its “increased monitoring process.”

Barbados, Gibraltar and Uganda are no longer on the grey list, while Kenya and Namibia are new additions.

“The FATF plenary congratulated Barbados, Gibraltar, Uganda and the United Arab Emirates for their significant progress in addressing the strategic AML/CFT deficiencies previously identified during their mutual evaluations,” the FATF said.

“These jurisdictions had committed to implement an action plan to resolve swiftly the identified strategic deficiencies within agreed time frames,” the task force added.

Countries that are on the FATF grey list find it harder to secure international financing and, according to a 2021 report by the International Monetary Fund, have a “statistically significant reduction in capital flows.”

Commenting on being dropped from the grey list, UAE Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan said, “This success is the outcome of collaborative efforts by the ministries, federal and local government entities, and the private sector to achieve the leadership’s directives and further strengthen the country’s leading position and international competitiveness.”

The UAE has long been accused of acting as a financial haven for those sanctioned by Western allies, including wealthy Russians and companies that have supported Moscow’s war efforts. But following Western pressure and a desire to be removed from the list, UAE authorities clamped down on illicit financing.

Bloomberg reported in November that money transfers had become subject to greater oversight such as banks demanding more documentation or justification in order for funds to go through.

The UAE government said it enacted 250 million dirhams ($68 million) worth of AML and CFT between January and October 2023. This is three times more than the same period in 2022.