The US agency (Bloomberg) has said that the United Arab Emirates is being threatened with entering the Financial Action Task Force’s gray list ‘on global oversight, after some members of the organization indicated that the Gulf state had not made sufficient progress with addressing illegal financial flows.
Bloomberg added that at least 3 members of the Paris-based Financial Action Task Force reported that “the UAE has not done enough to get out of the review process.”
And they explained that “it is possible that it will be placed on the list of countries subject to further monitoring,” according to which the agency quoted the members who refused to disclose their identities.
The report said: “The organization is currently holding its general session, and members are discussing the efforts of the UAE government to combat suspicious funds, and the decision is expected to be announced today, Friday.”
And the agency said avoiding the rating required a large majority of the 39 members of the Financial Action Task Force to vote, that “the UAE has made sufficient progress since the beginning of the evaluation period.”
A small number of votes to the contrary, Bloomberg sources explained, could lead to a jurisdiction being added to the list of countries under increased supervision.
The organization’s members indicated that the gray list classification was not as punishable as the “blacklist” of the most dangerous group, noting that “UAE officials are taking steps to address the country’s current shortcomings.”
And the American (Bloomberg) further said that “the decision may be the most important step the Financial Action Task Force should take in its three-decade history, given the position of the United Arab Emirates as a local financial center.”
The Financial Action Task Force, set up by the Group of Seven, includes about 20 countries on its gray list, and includes Iran and North Korea on the blacklist.
The UAE government said according to the report that it would “issue an official response once the decision is issued,” while a spokesman for the Financial Action Task Force said the group’s internal deliberations were confidential.
Breaks: United Arab Emirates ready for inclusion on FATF’s ‘gray list’ of high-risk jurisdictions, reports Bloomberg https://t.co/NMkBeSNhwS
– Koos Couvée (@KoosCouvee) March 4, 2022
The agency described the inclusion of the United Arab Emirates on the gray list as “a setback, at a time when it is facing greater competition from neighboring Saudi Arabia, which is working to develop its financial markets, and take steps to attract more investment. “
And she added: “The inclusion in the gray list will force the Wall Street banks, which are based in Dubai, to devote additional resources to compliance to avoid future sanctions from international regulators.”
“The decision could also have an impact on Abu Dhabi, the country’s capital and home of sovereign wealth funds with more than $ 1 trillion in assets,” Bloomberg added.
The agency is based on a report released by the International Monetary Fund last year, which stated that “the countries included in the gray list have experienced a significant and statistically significant decrease in capital flows.”
Kathryn Power, a former U.S. Treasury official, told Bloomberg in January that it could be difficult to determine the potential fallout in the UAE, although financial firms may already be dealing with the country as a high-risk area.
UAE strengthens anti-dirty money measures to avoid global watchlist https://t.co/EXAGjfX5sf
– FT World News (@ftworldnews) 16 January 2022
“Since the FATF’s 2020 warnings as part of the group’s joint assessment report, the UAE government has intensified its efforts to improve alignment with world standards for combating money laundering and terrorist financing,” the agency said.
“UAE officials have set up an executive office led by Hamid Al Zaabi to combat illegal flows, and are working in partnership with other members of the Financial Action Task Force,” she added.
Bloomberg quoted Al-Zaabi as saying earlier that “the UAE is fully committed to supporting the integrity of the international financial system.”
She said: “The state has set up courts that focus on financial crimes, created new rules for beneficial ownership and even announced a 9% tax on companies starting in 2023.”
The agency added, “The central bank has recently imposed sanctions on some lenders for violating anti-money laundering and new regulations on hawala, and on charities that often allegedly allow terror-related cash flows.”
And Bloomberg quoted the official Emirates News Agency (WAM) yesterday, Thursday, as saying that “the UAE raised more than $ 1 billion in fines against money laundering and terrorist financing last year.”
“Several major legislative amendments have recently been passed, including the Money Laundering Act, which includes broader powers related to confiscation, as well as control of virtual assets,” the Emirates News Agency said, citing Al Zaabi.
“The FATF’s joint assessment report, published in April 2020, highlighted how the UAE has taken important steps to tackle terrorist financing, but requests for information on money laundering have often been delayed,” the agency said.
“Since then, illegal flows into the country have attracted more investigation,” she added.
“As the evaluation period progressed, it became clear that the UAE was facing a difficult obstacle to avoid being included in the gray list,” Bloomberg sources said.
It added that “continued progress in combating illegal financial flows could allow the Gulf State to be removed from the list within a shorter period of time than other jurisdictions.”
Source : Aljazeera live + Bloomberg Agency