The UAE has launched a comprehensive assessment of proliferation financing risks as it strives to avoid being placed on the Financial Action Task Force (FATF) ‘grey list’ of countries with strategic deficiencies in their anti-money laundering and counter financing of terrorism (AML/CFT) regimes.
In April 2020, the Paris-based international watchdog warned the UAE it needs tighten AML/CFT compliance, particularly in areas vulnerable to abuse including the gold trade and luxury real estate. The FATF is expected to decide in late February or early March whether it will include the UAE on its grey list.
The UAE’s assessment of proliferation financing risks was initiated in recent weeks and is expected to be completed by the end of 2022.
It aims to assist the country’s public and private sectors to implement new requirements to identify, assess and understand proliferation financing risk to develop appropriate measures to mitigate or reduce risk.
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. It will also emphasise the private sector’s obligations under UAE law.
Identifying threats and weaknesses
The executive office of the committee for goods and materials subject to import and export control is leading the assessment and is forming teams specialised in collecting and analysing information.
These teams have prepared a report that identifies threats and weaknesses and proposes legislative and technical action plans to mitigate proliferation financing.
FATF deadline looms
With the FATF’s decision whether or not to include UAE on its grey list looming, one of the UAE’s most powerful figures outside the emirates’ ruling families, minister of state Ahmed al-Sayegh, has spearheaded efforts by the higher committee overseeing the national AML/CFT strategy.
He points to the efforts to improve AML/CFT effectiveness by law enforcement bodies, oversight institutions, the judiciary (which includes a new AML court in Dubai), ministries, the financial intelligence unit, and the executive office for anti-money laundering and counter terrorism financing (Trade-based Financial Crime, 29 October 2020).
But commentators doubt whether the UAE will have done enough to avoid being downgraded by the FATF.
According to an article earlier this month in the UK’s Financial Times newspaper, “Western officials say the UAE has made steps forward but is unlikely to avoid being placed on the FATF’s so-called grey list.”
The Financial Times article UAE steps up anti-dirty money measures to avoid global watchlist can be found by subscribers to the newspaper here.
Categories: Trade Based Financial crimes News