The FATF is a body that groups countries from China to the United States to tackle financial crime and the UAE was under surveillance among other more than 20 countries considered risky.
The UAE – the paradise for blooming businesses
The Gulf country which has historically attracted millionaires, bankers, and hedge funds, was placed in 2022 under scrutiny by the FATF regarding a high risk of money laundering and terrorist financing involving high-rank institutions, including banks. The delisting aims to recognise the country’s efforts towards banking and transactions transparency and will further fuel investments in the area, continuing to turn it into one of the wealthiest nations since the late 1950s.
However, despite it being grey-listed, the country continued to attract capital from businesses across the globe and has become a popular destination for cryptocurrency firms and Russians amid the ongoing war in Ukraine.
Moreover, Dubai has become the fourth most popular world destination in terms of luxury property market, after New York, Los Angeles, and London, while the UAE overtook Belgium in 2023 and became the world’s leading trading hub for rough diamonds.
The continue struggling for AML regulations
Despite UK’s FATF decision to whitelist the UAE, the European Union continues to consider the country at high risk for money laundering and terrorist financing, alongside around other 25 countries, including Afghanistan, North Korea, and South Africa. The European Union’s financial markets watchdog, ESMA, banned European banks and other institutions from clearing trades with the Dubai Commodities Clearing Corporation, which shows that, in some cases, being compliant with regulations doesn’t change much for the endgame.
Despite concerns coming from the European bloc’s regulator, the UAE is making efforts to deter financial crime and money laundering suspicions and develop non-oil sectors of the economy, including technology, tourism, and trade and logistics to diversify its funding and rely less on controversial forms of funding. At the same time, the competition between Gulf states has increased recently, while attracting money from abroad has been made a central part of the countries’ efforts.
Concrete measures taken by the UAE count for enhancing international cooperation, increasing financial investigations and prosecutions, as well as aligning virtual asset regulation with international standards to tone down cryptocurrency speculation and funding from questionable sources.
