The Financial Action Task Force (FATF) added the United Arab Emirates (UAE) to its “grey list” of countries subject to increased monitoring due to deficiencies in fighting financial crime.
The UAE was added as part of an update Friday acknowledging jurisdictions working with the FATF to improve the countering of money laundering, terrorist financing, and proliferation financing.
“The FATF identifies additional jurisdictions, on an ongoing basis, that have strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing,” the update said.
Once added to the grey list, the UAE began working with the FATF to address the identified deficiencies and was successful in implementing over half of the key recommended actions, the organization said. Among the UAE’s accomplishments were significant improvements to “its ability to confiscate criminal proceeds and engage in international cooperation,” the FATF said.
Among the seven FATF recommendations for the UAE that have yet to be implemented include:
- Implementing a more robust system to collect case studies and statistics used in money laundering (ML) investigations;
- Demonstrating a sustained increase in effective investigations and prosecutions of different types of ML cases consistent with the UAE’s risk profile;
- Identifying and maintaining a shared understanding of the money laundering/terrorist financing (ML/TF) risks between different sectors and institutions;
- Showing an increase in the number and quality of suspicious transaction reports filed by financial institutions and other entities;
- Achieving a more granular understanding of the risk of abuse of legal persons and legal arrangements for ML/TF;
- Enhancing the use of financial intelligence to pursue high-risk ML threats, such as proceeds of foreign predicate offenses, trade-based ML, and third-party laundering; and
- Proactively identifying and combating sanctions evasion.
The FATF removed Zimbabwe from the grey list after it “strengthened the effectiveness of its [anti-money laundering/countering the financing of terrorism] regime and addressed related technical deficiencies to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in October 2019,” the organization said.
Overall, 23 jurisdictions currently comprise the FATF’s list, to which Turkey, Jordan, and Mali were added in October.
The FATF noted it does not call for enhanced due diligence measures to be applied to these jurisdictions, “but encourages its members and all jurisdictions to take into account the information presented … in their risk analysis.”