UAE removed from the FATF Grey List
UAE removed from the FATF Grey List
On 23rd February 2024, UAE was removed from the FATF Grey List, a list also known as jurisdiction under increased monitoring list, which includes countries that are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing and proliferation financing.
At the FATF plenary meeting held from 21st to 23rd February 2024, UAE was confirmed to have successfully shown that it had met the action points and consequently been removed from the grey list. Similarly, Gibraltar, Barbados, and Uganda have also been removed from the Grey List.
Further, Kenya and Namibia are now added to the FATF grey list.
The United Arab Emirates was added to the Grey List on 4th March 2022. The UAE was supposed to fully implement FATF recommendations set out in its action plan that was issued following the UAE’s 2020 Mutual Evaluation.
The FATF recognised the variety of reforms taken by the UAE since its inclusion in the grey list, including:
1. The establishment of an Executive Office to counter ML/TF
2. Establishment of a special court to combat financial crimes
3. Adoption of new AML/CFT guidelines for FIs and DNFBPs
4. Adoption of a new penal code strengthening UAE’s ML/TF, anti-bribery and corruption regulations
The EOCN (Executive Office for Control and Non-Proliferation) and its team worked tirelessly to ensure compliance with the FATF recommendations and to enforce the national AML/CFT action plan. It also developed an automated intelligence platform called FawriTick that integrates details of financial crimes. Further, a reporting platform was specifically developed to address the AML/CFT compliance needs.
Fines worth more than AED 115 million were issued for money laundering, and more than 8000 inspections were carried out. The authorities seized AED 925 million in breaches of AML practices and procedures.
The United Arab Emirates signed various preliminary agreements for anti-financial crime and ratified extradition treaties with South Africa and Denmark.
The authorities are now working on the UAE’s National Risk Assessment plan which should be ready by the end of 2024.
All of the above reforms and strong enforcement helped take UAE out of Grey List.
Changes in FATF Grey List
Countries Removed from FATF's Grey List (Jurisdiction Under Increased Monitoring):
- UAE
- Gibraltar
- Barbados
- Uganda
Country Added to FATF's Grey List (Jurisdictions under Increased Monitoring):
- Kenya
- Namibia
FATF Grey List as of 23rd February 2024 / Jurisdictions Under Increased Monitoring 23rd February 2024
1. Bulgaria
2. Burkina Faso
3. Cameroon
4. Croatia
5. Democratic Republic of Congo
6. Haiti
7. Jamaica
8. Mali
9. Mozambique
10. Nigeria
11. Philippines
12. Senegal
13. South Africa
14. South Sudan
15. Syria
16. Tanzania
17. Türkiye
18. Vietnam
19. Yemen
20. Kenya
21. Namibia
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Implication of UAE's exit from FATF Grey List
The Financial Action Task Force’s decision to remove the UAE from the list of High-Risk Countries under Increased Monitoring (Grey List) is a welcome move and a recognition of the efforts put in by the country to strengthen its AML/CFT framework. The likely implications of UAE’s removal from Grey List are:
1. Less processing costs and time for international transactions involving foreign currency
2. Increased foreign trade and investments in the UAE
3. Lower bank charges
4. Enhanced credibility of the country’s financial system
5. Increased job opportunities due to an increase in international trade and investment
Action Items for FIs, DNFBPs, and VASPs consequent to changes in FATF Grey List
- Take a risk-based approach and conduct an Enterprise-Wide Risk Assessment (EWRA) if necessary.
- Align internal policies and procedures with EWRA.
- Assess the impact of FATF Grey List changes on Customer Risk Assessment procedures and conduct customer due diligence accordingly.
- Make changes to the High-Risk Countries list maintained by the entity.
Is it positive for the UAE to no longer be on the greylist?
The greylisting of a country by FATF affects a country adversely. Such countries are under increased monitoring, resulting in high costs associated with international trade, which eventually impacts its growth.It’s a huge advantage for UAE to come off the FATF Grey List.
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