Global: UAE Successfully Removed from FATF Grey List: Key Changes and Implications

On February 23, 2024, the United Arab Emirates (UAE) celebrated its removal from the Financial Action Task Force’s (FATF) Grey List, a compilation of jurisdictions under increased monitoring. This list identifies countries actively collaborating with the FATF to address deficiencies in their frameworks related to countering money laundering, terrorist financing, and proliferation financing.

During the FATF plenary meeting from February 21 to 23, 2024, the UAE demonstrated its commitment by fulfilling the specified action points, leading to its removal from the Grey List. Alongside the UAE, Gibraltar, Barbados, and Uganda also achieved this status. Conversely, Kenya and Namibia were added to the FATF Grey List.

Changes in the FATF Grey List as of February 23, 2024:

Countries Removed from FATF’s Grey List (Jurisdiction Under Increased Monitoring):

• UAE
• Gibraltar
• Barbados
• Uganda

Country Added to FATF’s Grey List (Jurisdictions under Increased Monitoring):

• Kenya
• Namibia

Implications of UAE’s Exit from FATF Grey List:

The removal of the UAE from the FATF Grey List holds significant implications for the country and the international community. Key effects include:

1. Streamlined International Transactions: Reduced processing costs and time for international transactions involving foreign currency.
2. Boost in Foreign Trade and Investments: Anticipated increase in foreign trade and investments within the UAE.
3. Lower Bank Charges: Potential reduction in bank charges associated with international transactions.
4. Enhanced Financial System Credibility: The UAE’s strengthened Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework contributes to enhanced credibility in its financial system.
5. Job Opportunities: Anticipated rise in job opportunities due to the surge in international trade and investment.

Action Items for Financial Institutions (FIs), Designated Non-Financial Businesses and Professions (DNFBPs), and Virtual Asset Service Providers (VASPs) Following Changes in FATF Grey List:

1. Risk-Based Approach: Adopt a risk-based approach and conduct an Enterprise-Wide Risk Assessment (EWRA) if necessary.
2. Policy Alignment: Align internal policies and procedures with the EWRA findings.
3. Customer Risk Assessment: Assess the impact of FATF Grey List changes on Customer Risk Assessment procedures and conduct customer due diligence accordingly.
4. Update High-Risk Countries List: Make necessary updates to the list of High-Risk Countries maintained by the entity to reflect the changes in the FATF Grey List.