DUBAI (Reuters) – The United Arab Emirates said it was assessing the risk that funds for banned weapons could pass through its trading hub and would take measures to prevent this, as it awaits a March decision on whether it will be added to a dirty money watchlist.
The UAE and the Financial Action Task Force (FATF), a global financial crime monitoring group, will hold meetings in Paris at the end of February to assess a progress report submitted by the UAE late last year. The watchdog in March will update its list of high-risk and other monitored jurisdictions.
A 2020 FATF report said the UAE needed “fundamental and major improvements” to avoid landing on its ‘grey list’ of countries under increased monitoring.
Countries on the list risk reputational damage, trouble accessing global finance and increased transaction costs.
The UAE’s Executive Office for Anti-Money Laundering and Counter Terrorism Financing, established last February, said the financing risks assessment initiated in recent weeks would help the public and private sectors implement new requirements.
“The risk assessment will cover how financial resources may be used to develop nuclear, chemical, and biological weapons, including the means, technologies, and dual-use goods used in their delivery,” said the statement on state news agency WAM.
“It will also emphasise the private sector’s obligations under UAE law,” it said.
The assessment is expected to be completed by the end of 2022.
The UAE, the Middle East’s financial capital and a major gold trading hub, has tightened regulations over the last few years to overcome a perception it is a hot spot for illicit money.
The Executive Office has already moved to raise standards for trading of bullion and increase ultimate owners transparency.
The UAE passed an anti-money laundering and terrorism financing law in 2018 and has said further strengthening of its regulatory framework was a national priority.
The foreign ministry says since company registries – for both special economic zones and onshore zones – became subject to tighter regulation since 2020, registrars have issued 65,500 warning notices and 585 million dirhams ($159.29 million) in fines, and suspended around 9,000 trading licences.
($1 = 3.6726 UAE dirham)
(Reporting by Lisa Barrington; Editing by Tomasz Janowski, Alexandra Hudson)