The United Arab Emirates, known for its financial center in Dubai, has been removed from a global Crime Watch list of countries at risk of illegal money activities, marking a significant victory for the nation.
The Financial Action Task Force (FATF) dropped the UAE from its ‘grey list,’ previously comprising about two dozen risky nations. This move is a result of the UAE’s efforts to enhance anti-money laundering measures, prompted by concerns raised in 2022 regarding money laundering and terrorist financing.
The UAE’s removal from the Crime Watch list is a notable achievement for the nation, once a regional trading hub, now transformed into one of the world’s wealthiest countries since the discovery of oil in the late 1950s.
The efforts to improve anti-money laundering practices were led by the Minister of Foreign Affairs, the brother of President Mohamed bin Zayed Al Nahyan. John Kartonchik, a director at UAE think tank Re/think, believes this development could enhance investor confidence and attract more foreign investment.
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Despite being on the grey list, the UAE remained an attractive destination for global investors, particularly in sectors like cryptocurrency. Additionally, the country’s luxury property market in Dubai ranked among the top globally in 2022.
However, the decision to delist the UAE contrasts with the European Union’s classification of the nation as a high-risk country for money laundering and terrorist financing, raising concerns about the effectiveness of the FATF list.
Markus Meinzer from the Tax Justice Network pointed out flaws in the decision-making process, emphasizing the need for greater transparency.
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Despite these criticisms, Jonny Bell from LexisNexis Risk Solutions expects the UAE to continue strengthening its anti-money laundering measures, especially amid growing competition among Gulf states to diversify their economies.
Measures undertaken by the UAE include enhancing financial investigations, fostering international cooperation, and aligning virtual asset regulations with global standards.
