January 3, 2022 (MLN): The United Arab Emirates (UAE) is at increased risk of being placed on a global watchdog’s list of countries subject to more oversight for shortcomings in combating money laundering and terrorist financing, even after a recent government push to stamp out illicit transactions, a report by Bloomberg noted today.
The Financial Action Task Force (FATF) is leaning toward adding the UAE to its “gray list” early this year, one of two classifications used by the intergovernmental body for nations determined to have “strategic deficiencies,” the report added.
“There are undoubtedly costs associated with being gray-listed,” said Katherine Bauer, a former Treasury Department official who led the U.S. delegation to the Middle East and North Africa Financial Action Task Force, a regional body modeled after the FATF.
“Many global regulators require that banks and financial institutions review, if not revise, their risk ratings and associated due diligence measures for counterparties in countries on the FATF list,” said Bauer, who’s now a fellow with the Washington Institute for Near East Policy.
The report further added that the UAE submitted a report to the FATF in November but hasn’t reached many of the thresholds needed to stay off the gray list. The group is expected to make a decision at a plenary meeting set for late February. There are still several opportunities for Emirati officials to make their case to the FATF, including during a planned trip to Paris in the coming weeks.
“We are taking this very seriously, having partnered with highly skilled and experienced specialists with a track record in meeting best international practices and standards,” Hamid Al Zaabi, director-general of the UAE Executive Office for Anti-Money Laundering and Counter-Terrorist Financing, said in a statement.
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