The United Arab Emirates, the home of the financial center of Dubai, has been exempted from the list of global regulatory body for countries at risk of illicit financial flows, a win for the country that can strengthen its international standing.
The Financial Action Group (FATF), a body that brings together countries from the U.S. to China to tackle financial crimes, on Friday dropped the United Arab Emirates from the “grey list” that includes about twenty countries considered endangered.
The Gulf State, a hotspot for millionaires, bankers and hedge funds, underwent a thorough scrutiny in 2022, when the Financial Task Force highlighted the dangers of money laundering and financing terrorism involving banks, precious metals, gems, as well as property.
The cancellation is a coup for the Regional Pearl and Fish Trade Center, which is now one of the world’s richest countries after the discovery of oil in Abu Dhabi in the late 1950s.
She has made coming off the list a priority, and strengthened her efforts to combat money laundering in a campaign led by the Foreign Minister and the brother of President Muhammad bin Zayed Al Nahyan. He said the move could boost confidence in the country and attract more money from abroad.
And the investors said… Maybe they will feel a little safer. “
Banks will also be able to reduce the cost of dealing with the country’s wealthy customers, a senior banker asked for an anonymous mention.
Despite being listed on the grey list, the UAE has continued to attract the world’s richest and become an increasingly popular destination for cryptocurrency companies and Russians in the wake of the war with Ukraine.
Dubai’s luxury real estate market only lagged behind New York, Los Angeles and London in 2022, according to real estate consultancy Nate Frank, while the United Arab Emirates outclassed Belgium last year to become the world’s rough diamond trade center.
However, the write-off process contradicts the assessment of European officials.
The European Union ranks the United Arab Emirates as a high-risk country in terms of money laundering and financing terrorism, alongside more than twenty other countries such as South Africa, North Korea and Afghanistan.
The European Union Financial Markets Supervision Authority banned European banks and other clearing transactions with the Dubai Commodity Clearing Foundation.
Marcus Menzer, the policy manager at the Tax Justice Network, which advocates financial transparency, said the removal of the United Arab Emirates from the list of the financial working group is ineffective.
Menzer said “There is room to interpret the rules.” “It’s easy to commit without changing much.” Understanding how decisions are made is impossible because they happen behind closed doors. “
Johnny Bell, Financial Crimes Compliance and Payments Manager at LexisNexis Risk Solutions, said the UAE will likely continue to strengthen measures to combat money laundering and financing terrorism.
There is growing competition among Gulf countries to develop non-oil sectors such as financial services, trade, logistics services and tourism. Attracting foreign funds is an essential part of the effort.
Measures taken by the United Arab Emirates include increasing financial investigations and prosecutions, promoting international cooperation, and aligning virtual asset regulation with international standards.
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Rizeq Alshbool
