PARIS: The Financial Action Task Force (FATF) has dropped the United Arab Emirates (UAE) from its “grey list”, making it a win for the country looking to bolster its international status, The News reported on Saturday.
Following its delisting, UAE — which is home to a dazzling financial hub Dubai — is now among the countries that are no longer on the global watchdog’s list of countries at risk of illicit money flows.
The FATF’s grey list comprises around two dozen countries which are currently considered risky in terms of their lack of tackling financial crime. The Gulf nation — that remains a millionaire, bankers and hedge funds’ magnet — was listed under strict scrutiny in 2022.
The country’s delisting is a coup for the one-time regional pearl and fish trading hub which is now one of the world’s wealthiest nations after the discovery of oil in Abu Dhabi in the late 1950s.
It had made getting off the list a priority, bolstering its anti-money-laundering efforts in a drive spearheaded by the minister of foreign affairs and brother of President Mohamed bin Zayed Al Nahyan.
John Kartonchik, a director at UAE think tank Re/think, said the move could boost confidence in the country and attract more money from overseas.
“Investors … may feel more secure,” he said.
Banks would also be able to cut the cost of dealing with wealthy clients in the country, said a senior banker, who asked not to be named. Despite being grey-listed, the UAE continued to attract the globe’s wealthy and it is an increasingly popular destination for cryptocurrency firms and Russians in the wake of war with Ukraine.
Dubai’s luxury property market trailed only New York, Los Angeles and London in 2022, according to property consultant Knight Frank, while the UAE last year overtook Belgium to become the world’s trading hub for rough diamonds. Jonny Bell, director of financial crime compliance and payments at LexisNexis Risk Solutions, said the UAE would likely continue strengthening its anti-money laundering and counter-terrorism financing measures.
There is increasing competition among Gulf states to develop non-oil sectors such as financial services, trade and logistics, and tourism. Attracting money from abroad is a central part of that effort.
Measures taken by the UAE include increasing financial investigations and prosecutions, boosting international cooperation, and aligning virtual asset regulation with international standards.
