• Home
• /
• UAE
• /
• Business

UAE on track to exit FATF ‘grey list’ soon

Country marks consistent progress on compliance measures to combat money laundering

The UAE is on track to be removed from the global financial crime watchdog’s grey list following its consistent progress on compliance measures to combat money laundering while four countries, including Jordan, have gone one step further and been dropped from the list.

Last week, Jordan, Cayman Islands, Panama, and Albania were removed from the Financial Action Task Force (FATF) Grey List, a list also known as jurisdiction under increased monitoring list, which includes countries that are actively working with the Paris-based body to address strategic deficiencies in their regimes to counter money laundering, terrorist financing and proliferation financing.

At the FATF plenary meeting ending on October 27, the four countries were confirmed as having successfully shown that they had met the action points during the FATF onsite.

On Friday, the FATF said that the UAE, a leading global financial hub, had substantially introduced compliance measures needed for its removal from the multilateral body’s list of countries under enhanced monitoring. In a statement, FATF said the UAE had made progress in areas such as facilitating money-laundering investigations, imposing sanctions on non-compliance at financial institutions, and increasing prosecutions. The task force said it would therefore conduct on-site visits to verify that these changes would be sustained.

A successful inspection would provide a signal that the UAE, along with other jurisdictions such as Barbados, Gibraltar and Uganda, could be removed from the list at an upcoming plenary session in February. Currently there are 23 countries on the Grey List — which is typically applied to countries with gaps in their anti-money laundering (AML)/countering the financing of terrorism (CFT) regimes, but where commitments have been made for swift resolution of these gaps.

Since March 2022, when the UAE was added to the list of jurisdictions under increased monitoring by the FATF, the second-largest Arab economy has been making significant progress with AML compliance measures. The UAE has enhanced its AML and CTF regulatory regime and increased enforcement actions across its main jurisdictions, including the DIFC and ADGM.

The Central Bank of the UAE has been taking stringent measures against companies for violating AML regulations. It has penalised many exchange houses and banks for not adhering to the regulations.

On July 6, 2023, the FATF released a report addressing the UAE’s progress in improving its compliance with the FATF Standards. In the report, FATF improved the UAE’s ratings and acknowledged the country’s commitment in tackling money laundering and terrorist financing.

Although the UAE remains on FATF’s grey list, the report indicated that various enhancements to the UAE’s AML and CTF regulatory regime and related enforcement actions since 2022 are bringing it closer in line with international expectations and standards.

FATF’s next review is due to be held in April/May 2024 and the UAE is expected to be removed from the list given its consistent progress in compliance.

FATF issues a set of international standards to promote effective implementation of legal, regulatory and operational measures for combatting money laundering and terrorist financing. These are known as the FATF Standards, which comprise 40 recommendations for countries to implement to demonstrate an effective AML and CTF regime