Illicit money flows: UAE set to be placed on FATF's 'gray list'

The United Arab Emirates is set for inclusion on a global watchdog’s “gray list” after some of its members indicated that the Gulf nation hadn’t made enough progress in tackling illicit financial flows, according to people familiar with the matter.

At least three members of the Paris-based Financial Action Task Force (FATF) have expressed the view that the UAE hasn’t done enough to exit the review process and therefore will likely get put on the group’s list of countries subject to more oversight, said the people in the know. 

The organisation is currently holding its plenary, where members are discussing the UAE government’s efforts to combat dirty money, and a decision is expected to be announced as early as Friday.

To avoid the designation, a significant majority of the FATF’s 39 members must vote that a country has made sufficient progress since the evaluation period began. Just a few votes to the contrary can result in a jurisdiction getting added to the list of nations under increased monitoring, the people said.

A gray-list classification isn’t as punitive as the group’s highest-risk “black list,” and it suggests that UAE officials are taking steps to address the country’s current deficiencies, the people said. Still, the decision is potentially the most significant step to be taken by the FATF in its three-decade history, given the UAE’s position as a regional financial centre. 

Pakistan to stay on gray list

Pakistan is likely to remain on the grey list of FATF until June for failing to meet some of the targets under the additional criteria, according to a media report on Friday.