Financial industry practitioners and the UAE authorities have reacted to the Financial Action Task Force (FATF) placing the UAE on its so-called grey list for increased AML monitoring, an obvious blow to the region's financial hub after making such significant strides in recent years to build its status in the world.
International Investment reported on 5 March that the FATF statement the day before came after a meeting of the sixth Plenary of the FATF under the German Presidency of Marcus Pleyer.
Sean Kelleher CEO, Mondial Dubai said: "I am surprised but not shocked. Surprised because we have been engulfed by our regulator, SCA working via the Central Bank, with AML/CTF work. Escalating noticeably during 2021.
"This betrayed the fact that some high-level work was being undertaken at speed. Surprise then, that the work was not enough. Not shocked because digesting all that information across regulators and across licensees would take a huge amount of time.
"In short, I would not be surprised for the UAE to fall back into the colourless lists as the centralised effort evidences change."
Sam Instone, director of AES International, said: "It's obviously very disappointing for the UAE to be added to the grey list when it has made substantial efforts in this area.
"Significant progress has been already been made since November and I am sure this will be temporary as the government has already committed to working closely with FATF and the overall speed of development in the UAE continues to be astonishing."
Writing on LinkedIn, Insight Discovery CEO Nigel Sillitoe said it was "not great news but had been forecasted by many financial analysts".
He added that it "will impact real estate companies and other sectors who face tougher money laundering rules from the UAE".
The official Emirates new agency WAM highlighted how senior officials have reaffirmed the UAE's strong commitment and ongoing efforts in relation to anti-money laundering (AML) and counter terrorist financing (CFT).
It said the UAE continued to implement an array of sophisticated and significant actions to combat financial crime and strengthen the effectiveness of the AML/CFT framework in line with the National Strategy for AML/CFT and the National Action Plan of the UAE.
To date, the competent UAE authorities had made unprecedented progress in adopting international standards for AML/CFT. They will continue to increase their efforts, including close and ongoing inter-agency coordination, international cooperation, and collaboration with the private sector.
Senior officials underscored the UAE's commitment at the highest level and reiterated that combating financial crime following the global AML/CFT agenda remains a strategic priority for the UAE.
H.H. Lt. General Sheikh Saif bin Zayed Al Nahyan, Deputy Prime Minister and Minister of the Interior, said, "The ongoing efforts to enhance the UAE's anti-money laundering system are a testament to our strong commitment to combating this global problem as a strategic priority. I commend the tremendous efforts of the UAE's Ministry of Finance, Ministry of Justice, Public Prosecution, Ministry of Economy, UAE Central Bank, UAE Security and Police Forces, Federal Customs Authority, Financial Intelligence Unit and all the UAE entities that are working closely and diligently together to fight financial crime.
"Our efforts to protect our security and economic prosperity will always come first. This means that the Ministry and the UAE law enforcement will continue to investigate and apprehend complex criminal networks and their assets in close coordination with our domestic and international partners."
H.H. Sheikh Abdullah bin Zayed Al Nahyan, Minister of Foreign Affairs and International Cooperation and Chairman of the Higher Committee Overseeing the National Strategy to Combat Money Laundering and Terrorist Financing, said, "The UAE is keen to accelerate the pace of the National Action Plan to combat money laundering and terrorist financing, as this file constitutes a strategic priority for the country. In my capacity as Chairman of the Higher Committee Overseeing the National Strategy to Combat Money Laundering and Terrorist Financing, I would like to underscore the UAE's commitment at the highest level by strengthening our national AML/CFT framework, including by working closely with FATF, our international partners, and the private sector on a sustainable and ongoing basis.
"Financial crime is a concern for all major economies, and we in the UAE are approaching this matter with the utmost seriousness. By continuing with our disciplined approach, we will make a genuine difference in our ability to prevent illicit financial flows and achieve our goal of making the UAE one of the strongest and most respected economies in the modern world."
Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, said, "The UAE remains firmly committed to further strengthening efforts to uphold the stability and integrity of the financial system. We will closely examine the detailed recommendations received from our international partners and FATF and ensure these are swiftly addressed and implemented in the coming period and over the long term."
He added, "To ensure that implementation of our National Strategy and National Action Plan for AML/CFT continues to focus on improving effectiveness in key areas, I will ensure that AML/CFT reforms remain one of the key priorities in our 2022 federal budget and future federal budgets."
Abdullah bin Touq Al Marri, Minister of Economy, said, "The interconnectedness of international organised criminal networks, often accelerated by technological advancement, is concerning for countries around the world. In the UAE, we are fighting back through the power of intelligence, advanced analytics, technology, investigations, and public-private partnerships. Our main objective has been to equip the public and private sectors in the UAE with the tools needed to strengthen our collective defences. This includes building the institutional capabilities set out in the UAE's National Risk Assessment, National Action Plan, and National Strategy for AML/CTF.
"We have also worked closely with the Ministry of Foreign Affairs and International Cooperation to facilitate coordination with the international community on financial crime concerns, a cornerstone of embedding a sophisticated financial crime framework across the UAE economy and beyond."
Abdullah bin Sultan bin Awad Al Nuaimi, Minister of Justice, said, "The Ministry of Justice has committed to harnessing all the resources available, including the federal and local courts, to combat money laundering. We are committed to preventing financial crimes and punishing the perpetrators as a top priority, and strengthening all efforts to prevent financial crimes and fraud. We have made breakthrough reforms in a short period to bring criminals to justice and continue to work efficiently and effectively to ensure the processing of the FATF's outcomes.
"To ensure proper legislation is in place to tackle money laundering typologies, the recently amended Federal Law No. 26 of 2021 and Federal Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organisations were issued on 13th September, 2021. The UAE will continue to build upon existing cooperation with our international partners and private sector stakeholders so that justice is always served.
"Our future economic growth is protected in line with the UAE's "Next 50" strategic roadmap recently established by our leadership."
Khaled Mohamed Balama, Governor of the UAE Central Bank and Chairman of the National Committee for Combatting Money Laundering and Financing of Terrorism and Illegal Organisations, stated that the Central Bank's regulations and policies for all licensed financial institutions in the UAE seek to address the worldwide challenge of money laundering and terrorist financing as a strategic priority. Much progress has been made in the financial sector's supervisory initiatives and regulatory oversight to develop an effective and integrated structure to combat financial crimes of all kinds, which FATF has already recognised.
"As a significant regional and international financial centre, we will continue to work tirelessly with our global partners in this regard. Together, we are committed to ensuring that our regulated financial industry has effective AML/CFT controls to safeguard our financial system," Balama said.
