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Dirty money? UAE may be added to financial ‘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 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, who requested anonymity as the matter is private.

The organization 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 center. FATF, set up by the Group of Seven major economies, has some two dozen nations — including Turkey, Zimbabwe and Albania — on its gray list, with Iran and North Korea on the black list.

The UAE government said it will release an official response once the decision is out. A spokesperson for FATF said its internal deliberations are confidential.

For the UAE, being gray-listed would be a setback at a time when it faces greater competition from neighboring Saudi Arabia, which is growing its financial markets and taking steps to lure more investment.


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