The Financial Action Task Force (FATF), responsible for combating money laundering and terrorism financing globally, has announced that the UAE completed all 15 recommendations outlined in its action plan.
According to the Paris-based watchdog, UAE strengthened the effectiveness of its AML/CFT regime to meet the commitments in its action plan, which includes:
- Increasing outbound MLA requests to facilitate ML/TF investigations
- Improving understanding of ML/TF risks of DNFBP supervisors, applying effective and proportionate sanctions for AML/CFT noncompliance involving FIs and DNFBPs, and increasing STR filing for those sectors
- Developing a better understanding of the risk of abuse of legal persons and implementing risk-based mitigating measures to prevent their abuse
- Providing additional resources to the FIU to increase its capacity to provide financial intelligence to LEA and making greater use of financial intelligence, including from foreign counterparts, to pursue high-risk ML threats
- Increasing investigations and prosecution of ML
- Ensuring effective implementation of TFS through sanctioning noncompliance among reporting entities and demonstrating a better understanding of UN sanctions evasion among the private sector
“The UAE is, therefore, no longer subject to the FATF’s increased monitoring process,” it said.
HH Sheikh Abdullah bin Zayed Al Nahyan, Minister of Foreign Affairs and Chairman of the Higher Committee Overseeing the National Strategy on Anti-Money Laundering and Countering the Financing of Terrorism, expressed gratitude for the collective efforts of relevant ministries, federal and local entities. He emphasised that this accomplishment reflects the UAE’s commitment to strengthening its position as a leading economic, trading, and investment hub while adhering to international laws safeguarding the integrity of the global financial system.
“The UAE will continue to build on its immense success through comprehensive and integrated collaborations with international partners, as well as the relevant organisationss and entities to enhance its position within the global financial system,” said Sheikh Abdullah. “This will include continuing to reinforce a legal and regulatory framework, and activating collective efforts on a global scale to combat financial crimes.”
“In this regard, the country’s endeavors demonstrate a constant approach to address global money laundering and terrorism financing, as well as illegitimate organisations, and to amplify the UAE’s crucial and effective role in defending the safety and stability of the world’s financial system.”
The UAE has increased the number of Mutual Legal Assistance Treaties (MLATs) and has so far signed 45 treaties, with more to be signed this year. In financial information exchange, the UAE sent 200 outgoing MLAT requests between January and October 2023 to facilitate investigations into terrorist financing, money laundering, and predicate crimes.
In regard to suspicious transaction/activity reports (STRs), the first ten months of this year saw an increase in the participation of all sectors in this process and the number of reports submitted compared to 2022, state news agency WAM reported. The Designated Non-Financial Businesses and Professions (DNFBP) sector achieved a 266% increase in STRs, while the real estate sector increased its STRs by 106%. The Corporate Service Providers and Trust Funds sector achieved a 49% increase in STRs, while the total STRs submitted by all DNFBPs reached 90%.
In terms of law enforcement measures, the value of fines imposed by regulatory authorities in AML/CFT between January and October reached Dh249.2 million, compared to Dh76 million in 2022, a three-fold increase. Regarding targeted financial sanctions, regulatory authorities collected over Dh10 million in fines imposed as targeted financial sanctions between July and October 2023. The amount recorded on October 31, 2023, for fines related to targeted financial sanctions, represents a 448% increase compared to the fines imposed in 2022.
Other officials, including Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, Abdullah bin Touq Al Marri, Minister of Economy, and Abdullah bin Sultan bin Awad Al Nuaimi, Minister of Justice, highlighted the UAE’s determination to intensify participation in multilateral organisations and strengthen bilateral relations to enhance cooperation in combating financial crimes.
Ahmed Ali Al Sayegh, Minister of State, emphasised the UAE’s commitment to implementing effective policies aligned with international best practices to maintain its position as a global financial and economic hub.
“The UAE’s constant commitment to tackle the challenges and risks in the global financial system is a fundamental factor in achieving its vast progress in strengthening its approach and commitment to encounter money laundering and the financing of terrorism, as a national and strategic priority, in line with global standards and international laws,” said Khalid Mohammed Salem Balama Al Tamimi, Governor of the Central Bank of the UAE. “Our efforts in the National Committee and the Central Bank have contributed to the enhancement of UAE’s proactive role in fighting financial crimes at the international level through the adoption of a risk-based regulatory approach, issuance of laws, regulations, and guidance, as well as enhancement of the licensed financial institutions’ understanding of the risks and effective implementation of their legal obligations related to risks mitigation of illicit activities in the financial system.”
Hamed Al Zaabi, Director-General of the Executive Office of Anti-Money Laundering and Counter Terrorism Financing, praised the dedication of federal and local authorities alongside the private sector in aligning with the national strategy and action plan. He emphasised continued efforts to strengthen national capabilities and foster regional and global partnerships to enhance economic and financial security.
Al Zaabi noted that Memoranda of Understanding (MoUs) provide a good framework for exchanging best practices, as the Executive Office has signed MoUs with its counterparts in the Arab Republic of Egypt, the Kingdom of Morocco, and the Republic of Kazakhstan to enhance bilateral cooperation.
He emphasised that the UAE’s next National Strategy on Anti-Money Laundering and Countering the Financing of Terrorism, covering 2024-2027, will be launched in the coming months.
Al Zaabi added that later this year, the results and recommendations of the latest National Risk Assessment (NRA), which began last year with the support of the World Bank Group, are also expected to be announced.