UAE removed from the FATF "gray list"

The decision was made at the last meeting of the organization held in Paris on February 23, 2024.

As a result of the audit, FATF experts assessed the UAE's actions to combat financial crimes as successful.

FATF inspection result

According to FATF representatives, the UAE's withdrawal from the "gray list" does not mean that the country has achieved a "perfect system". The organization evaluated the measures already taken and the UAE's persistent political will to continue improving the situation, FATF President Raja Kumar stressed at a press conference. According to him, the level of beneficial ownership of legal entities has become transparent, the financial intelligence system has been strengthened to support the investigation of complex money laundering cases, and the monitoring of the implementation of financial sanctions has become stricter.

Do the controls affect banks?

According to information from Bloomberg, banks now closely monitor remittances, including repatriation of funds to CIS countries. Some have tightened document requirements and even blocked funds if there is doubt as to their origin or if the justification for the transfer is not convincing enough.

The UAE government reports that nearly 250 million dirhams ($68 million) in anti-money laundering and counter-terrorist financing fines were imposed between January and October 2023, three times the amount imposed in 2022.

The UAE's removal from the gray list received particular support from Wall Street banks, many of which are active in the UAE. However, since the country's inclusion on the list, they have faced increased FATF compliance costs, forcing some to outsource more functions to India.

What's next?

In this regard, one should not assume that the UAE's control over non-resident businesses will become moderate. On the contrary, the UAE, in order to maintain its reputation, will strengthen supervision over banking operations, financial and tax reporting.

Our clients have already started coming with requests for accounting support in Dubai.

Contact us to:

• avoid irregularities that may entail sanctions from the UAE in the form of fines;
• register your company for tax purposes in the UAE;
• keep monthly accounting records, books of accounts;
• prepare and file reports with the tax authorities of the Arab Emirates;
• conduct annual audits;
• file ESR notifications and reports.

We will also assist you in cases of:

• requesting confirmation of the source of origin of funds;
• Withdrawal of funds from frozen accounts;
• compliance audits;
• if you need to open a bank account for your company.

We look forward to hearing from you.