UAE dropped from FATF’s financial crime Watch List

Posted 26 Feb 2024

Updated 27 Mar 2024

2 min read

At the recently held Financial Action Task Force (FATF) plenary meeting, UAE was confirmed to have been dropped from its ‘Jurisdictions under Increased Monitoring’ (Grey list).
- Additionally, Gibraltar, Barbados, and Uganda have also been removed from FATF’s Grey List.
- Kenya and Namibia have been added to the Grey List.

FATF’s Black and Grey Lists
- FATF publicly lists countries with weak measures to combat Money Laundering (ML) and Terrorist Financing (TF) regimes in two documents:
  - High-Risk Jurisdictions subject to a Call for Action (i.e. "Black List"): Jurisdictions with serious strategic deficiencies to counter ML, TF, and proliferation financing.
  - Grey List: Jurisdictions with strategic deficiencies in their regimes to counter ML, TF, and proliferation financing.
- Currently, there are only 3 countries (Democratic People’s Republic of Korea, Iran, and Myanmar) in FATF Black List.

Significance of UAE’s removal from Grey List for India
- Boost to investment in Indian Non-Banking Financial Companies (NBFCs).
  - A 2021 Circular from RBI stated that “investments in NBFCs from FATF non-compliant jurisdictions shall not be treated at par with that from the compliant jurisdictions.”
- Reduced compliance cost and cost of funding for financial institutions and individuals operating in UAE.

Established in 1989 by G7 countries to combat money laundering.
In 2001, its mandate was expanded to also combat terrorist financing.
Since 2019, FATF has had an open-ended mandate, after originally operating under fixed-terms.
Member Countries: 39, including India.

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