UAE's Removal from FATF Grey List Boosting Business, Investment Opportunities

12 Mar, 2024

UAE's Removal from FATF Grey List Boosting Business, Investment Opportunities

The Financial Action Task Force (FATF) is a global entity dedicated to combatting financial crimes like money laundering and terrorism financing. In its recent plenary meetings held in Paris from February 21 to 23, 2024, FATF updated its "Grey List" or “Jurisdictions under Increased Monitoring.” This list identifies countries committed to resolving strategic deficiencies in their Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) frameworks within specified timeframes. Kenya and Namibia were newly added to the Grey List, while Barbados, Gibraltar, Uganda, and the United Arab Emirates (UAE) were removed, leaving 21 countries on the list.

Research by the IMF suggests that being on the Grey List can adversely affect a country's total capital inflow by as much as -7.6% of its GDP. Despite this, the UAE, as a global business hub, experienced a positive trend in Foreign Direct Investment (FDI) inflows, reaching $22.737 billion in 2022, up nearly 10% from the previous year.

While FATF doesn’t mandate enhanced due diligence solely for Grey List countries, directives from entities like the EU and Reserve Bank of India can influence risk assessments. The UAE’s exit from the Grey List could lead to increased confidence among international financial institutions, potentially facilitating more trade and investment opportunities for UAE businesses. Sheikh Abdullah bin Zayed Al Nahyan's reaffirmation of the UAE’s commitment to combating financial crimes further strengthens the country's reputation and attractiveness to global investors.

AKW Consultants offer expertise in Anti-Money Laundering Compliance to help businesses navigate regulatory requirements and maintain compliance.