Rabat – The Financial Action Task Force (FATF), an intergovernmental organization dedicated to fighting money laundering, has listed the United Arab Emirates (UAE) on its “gray list,” reflecting concerns that the Gulf state is not doing enough to deter criminals from hiding wealth.
Announced on Friday, the decision put the UAE on a list of 23 other countries including Jordan, Syria, and Yemen.
The report will not directly impact business in the UAE as the country is a crossroad for multiple economic free zones and grand real estate ventures. However, the listing will dent the UAE’s effort to promote itself as a business-friendly landscape, many market observers have observed.
The listing will directly affect the country’s international rankings from rating agencies as they tend to consider gray listing as risky, media reports and analysts have argued.
While pointing out the significant effort the UAE must undertake to stop money laundering, the international body hailed the significant progress the Gulf country has achieved in terms of fighting financial criminal activities.
In addition to legal reforms to better keep track of corporate financial transactions, noted the report, the UAE has recently signed multiple extradition agreements with many countries.
But the country’s reputation as a smuggling hub is complicating the task to combat financial criminal activities.
The US State Department recently said that cash smuggling is a significant problem in the Middle Eastern country.
Reacting to the report, Emirati officials have sought to reassure investors that the country remains a safe investment destination.
“The UAE will continue its ongoing efforts to identify, disrupt and punish criminals and illicit financial networks in line with FATF’s findings, the UAE’s National Action Plan, as well as through close coordination with our international partners,” an Emirate Official said.
