UAE exits FATF’s ‘grey list’ amid reforms

FATF at a recent plenary meeting (Source: FATF)

The UAE has been removed from the grey list of global watchdog Financial Action Task Force (FATF) after the country met all the required reforms to clamp down on illicit financial flows.

FATF President Raja Kumar made the announcement about the outcomes of the plenary in a statement on Friday. Other countries to exit the grey list include Barbados, Gibraltar and Uganda. Meanwhile, Kenya and Namibia were added to the grey list, while South Africa has not managed to escape its grey listing yet.

To get off the grey list, a significant majority of the FATF’s membership must vote that a country has made sufficient progress since the evaluation period began.

An exit from the grey list marks a swift turnaround for the UAE, which was initially added to the list of jurisdictions under increased monitoring in March 2022. Assessors from the Paris-based FATF conducted an on-site visit last month and subsequent feedback on the UAE’s action plan noted significant progress by the country.

Late last year, UAE officials went on a tour to key FATF states, including trips to the US, Switzerland and Singapore, to rally support, according to a Bloomberg report.

UAE makes several fixes

The UAE founded an Executive Office for Anti-Money Laundering and Counter-Terrorism Financing in 2021 after passing an anti-money laundering (AML) and terrorism financing (CTF) law in 2018.

The UAE is a burgeoning financial centre and a key player in the global financial market. The exit from the grey list is expected to be particularly welcomed by Wall Street lenders who have been grappling with increased compliance costs since the designation, forcing some to outsource more functions to India.

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