The grey-list exit will increase the international community’s confidence in the country’s financial services sector
The UAE was removed from the grey list of global watchdog Financial Action Task Force (FATF) on Friday, a decision that could lead to smoother foreign currency transactions, lower inter-bank fees, and increased trade and investment.
“The UAE’s removal from the FATF’s grey list reflects the country’s commitment to fighting financial crime and sanctions evasion and will boost trust in its financial system,” Mohamed Daoud, Industry Practice Lead at Moody’s Analytics said in an emailed statement.
“Even so, don’t expect the international compliance community to immediately change the way it interacts with the country. Think of it as a gradual thawing, not an instant spring,” Daoud explained while highlighting that the full benefits of the removal from the grey list may lag behind the official announcement as foreign institutions will take time to update their anti-money laundering and counter-terrorist financing (AML/CFT) measures.
For the UAE, a country that was added to the list of jurisdictions under increased monitoring in March 2022, the delisting marks a rapid turnaround.
“This success is the outcome of collaborative efforts by the ministries, federal and local government entities, and the private sector, to achieve the leadership’s directives and further strengthen the country’s leading position and international competitiveness,” said Sheikh Abdullah bin Zayed Al Nahyan, the UAE Foreign Minister.
Jamal Saleh, the director general of the UAE Banks Federation said the move will increase the international community’s confidence in the country’s financial sector and enhance the flow of foreign direct investment in different sectors.
UAE’s grey-list exit
Meanwhile, the reforms that were implemented by the UAE to exit FATF’s grey list include increasing financial investigations and prosecutions, boosting international cooperation, and aligning virtual asset regulation with international standards.
The FATF highlighted how the Gulf state had strengthened its regime for anti-money laundering and combating terrorist financing while noting that “the UAE is therefore no longer subject to the FATF’s increased monitoring process.”
The Emirates founded an Executive Office for Anti-Money Laundering and Counter-Terrorism Financing in 2021 after passing an AML and CTF law in 2018.
“We remain committed to collaborating with our partners and stakeholders to fulfil our long-term sustainable AML/CFT strategy,” said Ahmed Jasim Al Zaabi, chairman of the Abu Dhabi Department of Economic Development (ADDED).
The UAE, home to the Abu Dhabi Global Market and Dubai International Financial Centre is a burgeoning financial centre and a key player in the global financial market. Its delisting 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.
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