FATF puts UAE to ‘gray’ money laundering watch list

The Financial Action Task Force(FATF) has placed the United Arab Emirates (UAE)on its “gray list” over concerns that the global trade hub isn't doing enough to stop criminals and militants from hiding wealth there. The decision late Friday night by the Paris-based Financial Action Task Force puts the UAE, home to Dubai and oil-rich Abu Dhabi, on a list of 23 countries including fellow Mideast nations Jordan, Syria and Yemen. While praising the UAE's “significant progress,” the body said more needed to be done. Already, the UAE has established a corporate registry and signed extradition agreements with other nations.

While not expected to dent business in the Emirates, a federation of seven sheikhdoms on the Arabian Peninsula home to a multitude of economic free zones and real estate ventures, it could strike at the country's carefully managed business-friendly image. Ratings agencies and other financial institutions also consider such a listing as a risk, which can affect interest rates for loans. However, the UAE long has been known as been known as a place where bags of cash, diamonds, gold and other valuables can be moved into and through. In recent years, the State Department had described “bulk cash smuggling" as "a significant problem” in the Emirates.

“The UAE will continue its ongoing efforts to identify, disrupt and punish criminals and illicit financial networks in line with FATF's findings and the UAE's National Action Plan, as well as through close coordination with our international partners,” the Emirates' Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism said.