UAE removed from the FATF “grey list”

On 23 February 2024, the UAE was removed from the Financial Action Task Force’s (FATF) list of “Jurisdictions under Increased Monitoring”, the so-called “grey list”. The UAE has been on the grey list since its inclusion on 4 March 2022.

FATF, the global anti-money laundering watchdog, had added the UAE to its grey list due to “strategic deficiencies” in the country’s efforts to counter money laundering and terrorist financing. Removal from the grey list required the UAE to fully implement the recommendations set out in the FATF’s action plan that was issued following the FATF’s 2020 Mutual Evaluation of the UAE.

At its October 2023 plenary meeting, the FATF recognised that the UAE had taken various actions to improve its overall AML/CFT compliance. On a regulatory level, the UAE has implemented several key reforms since its inclusion on the grey list, including: 

1. establishment of the Executive Office to Combat Money Laundering and Terrorist Financing; 
2. establishment of a specialist court to combat money laundering and financial crime;
3. adoption of new AML/CTF guidelines for financial institutions and designated non-financial businesses and professions; and 
4. adoption of a new Penal Code which bolstered the country’s existing anti-money laundering, bribery, and corruption regulations. 

The UAE’s financial service regulators have also shown an increased willingness to investigate and take enforcement actions in relation to money laundering in line with the country’s risk profile. On the ground, we have seen a large increase in the number of enforcement actions related to AML deficiencies.

The FATF’s decision is a welcome recognition of the UAE’s concerted effort to enhance its AML/CFT framework. Given the UAE’s position as major international and regional financial centre and trading hub, its removal from the grey list is a significant step.

The outcomes of the FATF Plenary session can be found here.