Awaiting the Outcome of the FATF Meeting: UAE Nears Exit from Grey List

It is now expected that the Financial Action Task Force (FATF) will announce, at the end of its annual meeting, which begins today in Paris and continues until the 24th of this month, the removal of the United Arab Emirates from the enhanced follow-up stage, commonly known as the grey list, in the areas of combating money laundering and terrorist financing, where the UAE has been placed since 2020.

This announcement will be the result of concerted efforts by the UAE to develop and enhance a comprehensive and effective system to combat money laundering and terrorist financing in accordance with FATF standards.

This decision confirms, upon its announcement, that the UAE has fulfilled the specific requirements outlined in the action plan proposed by the FATF following the mutual evaluation report in 2020.

This demonstrates the UAE’s commitment to the FATF’s forty recommendations, the industry’s benchmark standards, and showcases the effectiveness of its system in combating money laundering and terrorist financing, assessed through the FATF’s 12 criteria.

While the recommendations focus on assessing the anti-money laundering system in terms of laws, regulations, institutions, and procedures, the evaluation of the system’s effectiveness concentrates on its legal and institutional frameworks and its ability to achieve desired outcomes.

The FATF’s decision will affirm the progress made in combating financial crimes and the maturity reached by the system developed by the UAE through comprehensive participation at both federal and local levels from all relevant entities, including ministries, authorities, regulatory bodies, courts, and others. This participation enhances the development of legal and enforcement frameworks, capacity building, international judicial agreements, and partnership with the private sector.

Following the exit from the grey list, UAE’s efforts are expected to focus on enhancing the current system and ensuring its effective functioning in combating financial crimes. Additionally, a new action strategy for the period from 2024 to 2027 will be devised, along with preparations for the next evaluation by the FATF for the UAE in 2026.

The UAE is considered a global hub for trade, finance, logistics, tourism, witnessing significant growth over the past two decades. It hosts more than 62 licensed banks under the Central Bank, housing two global financial centers – the Dubai International Financial Centre and the Abu Dhabi Global Market, which accommodate hundreds of international financial institutions. Moreover, the UAE is one of the largest re-export markets in the world.

It is worth mentioning that the FATF was established in 1989 by the Group of Seven to develop procedures and standards for combating money laundering and terrorist financing. It comprises 39 members, including the European Union and the Gulf Cooperation Council, in addition to 9 regional groups and observer members such as United Nations organizations, the International Monetary Fund, the World Bank, among others.

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