UAE removed from money laundering ‘grey list’

The international body that oversees the fight against money laundering has removed the United Arab Emirates (UAE) from its “grey list”, two years after it identified weaknesses in the Gulf state’s ability to tackle financial crime.

The Paris-based Financial Action Task Force said that the UAE was no longer subject to additional scrutiny by the body, having demonstrated that its ability to police illicit money flows had significantly improved.

The decision is a victory for the UAE, which has become an increasingly important global trading hub but has faced criticism over lax scrutiny of money flows, with transparency campaigners claiming the country has been used by criminals to hide international corruption.

Read also: Pakistan seeks $6 billion IMF loan amidst debt challenges

Barbados, Gibraltar and Uganda were also removed from the grey list, while Kenya and Namibia were placed on it.

FATF, which designs international standards to help governments tackle illicit financing for crimes ranging from terrorism to drugs trafficking, said the UAE and others removed from the grey list had taken “substantial steps” to improve their financial crime fighting systems.

The countries “have demonstrated the necessary political will to sustain and continue these changes”, said FATF president Raja Kumar.

Being on the grey list does not impose restrictions on the country, but it acts as a red flag for international counterparties such as banks, often leading them to conduct heavier due diligence.

The Gulf country, a magnet for millionaires, bankers and hedge funds, was placed under closer scrutiny in 2022, when the FATF highlighted the risk of money laundering and terrorist financing involving banks, precious metals and stones as well as property.