UAE Expected to Exit FATF Grey List on February 23

The UAE is scheduled to be taken off the FATF “grey list” on February 23, which indicates that this country has made a very good progress in AML/CTF measures. This move is anticipated to improve the investment environment, encouraging investors to gain more confidence and investing more money to funds managed in the jurisdiction. The delisting is an indication of the UAE’s dedication to implementing financial integrity and maintaining global financial stability and shows the significance of ongoing reform and compliance.

As far as asset and fund managers in the UAE are concerned, the tax environment will become more stable following the country’s removal from the grey list. This development is perceived as a positive sign by the investors; consequently, their reputation might be enhanced and the business opportunities might be increased. Investors prefer countries with strong AML/CFT regulatory frameworks, and the lifting of the UAE from the gray list might increase the confidence in its financial system, thus attracting more capital inflows and businesses.

The second benefit is that the delisting removes the restrictions and compliance requirements for investing in jurisdictions on the FATF grey list, and thus, the delisting gives the asset and fund managers new market opportunities. This could create more market access and bring international financial groups to start or develop their operations in the UAE. Moreover, the country’s stronger knowledge of money laundering and terrorist financing risks, better risk-based approaches and enhanced financial intelligence capacities ensure the compliance with international standards.

The UAE has recorded much progress in its AML/CFT regime, as evidenced by the FATF Plenary of October 2023 which took place after the country became a member in March 2022. The Central Bank of the UAE has responded to the issues of money laundering with tough measures applied to the companies violating AML rules, which has resulted in penalties for a great number of exchange houses and banks. The UAE’s ability to help in the detection of money laundering cases, enforcement of financial sanctions and prosecution of non-compliance shows its determination in dealing with identified weaknesses and improving its financial regulatory framework.