A worldwide money-laundering watchdog has placed the UAE on its “gray list” due to fears that the global commerce center isn’t doing enough to prevent criminals and extremists from concealing cash there.
The Paris-based Financial Action Task Force made the judgment late Friday night, putting the UAE, home to Dubai and oil-rich Abu Dhabi, on a list of 23 countries that includes Jordan, Syria, and Yemen.
While it is unlikely to harm business in the Emirates, a federation of seven sheikhdoms on the Arabian Peninsula that is home to a plethora of economic free zones and real estate endeavours, it may damage the country’s carefully cultivated business-friendly image.
Rating agencies and other financial institutions view such a listing as a risk, which can impact loan interest rates.
While complimenting the UAE for its “significant progress,” the FATF noted more needs to be done.
The UAE has already developed a business register and inked extradition treaties with other countries.
The UAE, on the other hand, has long been renowned as a site where bags of cash, jewels, gold, and other valuables may be transferred into and out of.
In recent years, the State Department has identified “bulk cash smuggling” in the UAE as a “significant problem.”
A 2018 analysis by the Washington-based Center for Advanced Defense Studies claimed that war profiteers, terror financiers, and drug traffickers sanctioned by the US have utilized Dubai’s boom-and-bust real estate market as a safe haven for their money.
Emirati authorities took to Twitter and the state-run WAM news agency to reassure investors that the UAE remained a secure, regulated environment to conduct business and that the foreign concerns will be addressed.
“The UAE will continue its ongoing efforts to identify, disrupt, and punish criminals and illicit financial networks in accordance with the FATF’s findings and the UAE’s National Action Plan, as well as in close coordination with our international partners,” the statement said.
According to the Emirates’ Executive Office of Anti-Money Laundering and Counter-Terrorism Financing.
Anwar Gargash, a senior Emirati ambassador, claimed on Twitter that the government has “made significant progress in combating financial crime.”
“As a key economic hub, we are determined to strengthen strategic cooperation with our partners to address this global challenge,” he added.