FATF Demotes UAE to Money Laundering ‘Gray List’

The Financial Action Task Force, an intergovernmental agency that fights against money laundering, will soon put the United Arab Emirates on its so-called “gray list” over concerns the country’s leaders aren’t doing enough to squelch illegal financial activities, Bloomberg reported Thursday (March 3).

FATF’s “gray list” is one step below its “black list,” which currently includes North Korea and Iran. Gray list countries are “actively working” with the FATF to deal with weaknesses in its systems to “counter money laundering, terrorist financing, and proliferation financing,” but are under “increased monitoring” for not yet taking steps to curb the problems.

Pakistan, Turkey and Albania are among the other countries on the gray list, CNBC reported Friday (March 4).

The UAE is home to several international companies’ headquarters, one of the world’s busiest airports and a population that’s comprised of only about 10% natives. Its addition to the “gray list” could be one of the most significant decisions the FATF has ever made, Bloomberg reported.

Related: FinCEN Deputy Director Touts AML Improvements

On Thursday (March 3), AnnaLou Tirol, deputy director of money laundering and terrorist financing watchdog Financial Crimes Enforcement Network (FinCEN), told attendees at AML Intelligence’s Women in FinCrime event that the group is making progress on curbing money laundering.

Congress passed the Anti-Money Laundering Act in January 2021, and Tirol said in her presentation at the event that the “landmark piece of legislation…will bolster the United States’ national security and help better protect our communities and people.”

Also read: Indonesia, UAE Banks Collaborate on Cross-Border Payments

In November, the central banks of Indonesia and the UAE signed an agreement to boost payment system cooperation. The deal is focused on safer and more efficient transactions, cross-border payment systems and anti-money laundering and anti-terrorism efforts.

The partnership aims to improve collaboration in “payment systems and digital financial innovation, including conventional and Islamic finance,” according to a statement from UAE’s central bank.