As a result of the UAE's inclusion on the 'grey list' in March 2022, it has been subject to increased monitoring and assessment by the FATF over the last two years. In October 2023, the FATF acknowledged the "significant progress" that the UAE had made in implementing the FATF's recommendations and improving the effectiveness and technical compliance of its AML and CFT measures. That acknowledgment led to much speculation that the UAE would be removed from the 'grey list' at the FATF's next plenary session – a prediction that has now proved true.
In a statement published on 23 February 2024, the FATF identified a number of specific actions that the UAE had successfully implemented to strengthen the effectiveness of its AML and CFT regimes. These included increasing money-laundering investigations and prosecutions; educating Designated Non-Financial Businesses and Professions on money laundering and terrorism financing risks and applying sanctions for non-compliance; and making greater use of financial intelligence, including from foreign counterparts, to pursue high-risk threats.
For the UAE, removal from the FATF's grey list is a major accomplishment. Grey-listing can have a detrimental impact on a country's economy, with one of the most notable consequences being a reduction in foreign investment. By getting off the list, the UAE has demonstrated its compliance with, and commitment to, international AML and CFT standards, which should give foreign investors greater confidence in the integrity of its financial systems.
The UAE will be keen to cement its reputation as a safe investment destination and a proactive prosecutor of financial crime. It therefore remains essential for companies in the UAE to ensure that they have proper and effective AML and CFT policies and procedures in place.
Next steps
To assist clients, we have recently published the UAE chapter of the Hogan Lovells’ Global Investigations Guide, which can be found here: https://guide.hoganlovellsabc.com/country?one=AE
Authored by Jessica Quinlan and Randall Walker.
