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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.

 

About FATF

  • 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.
  • India was admitted in 2010 as 34th member.
  • Tags :
  • UAE
  • Money Laundering
  • Financial Action Task Force
  • Terrorist Financing
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