UAE FATF GRAY LISTING - How we deal with it

[Fred]

As this was already expected - DLS Dubai started working since the beginning of 2022 with more local UAE Banks as well as International Banks to still be able to provide the full range of service and possibilities for our clients.

What is to be expected from a FATF Graylisting in practice:
- More lenghty and intensive Bank Account Opening Compliance Process
- Potentially more questions for Wire Transfers

It's more important then ever before to have now a reliable Corporate Service Provider on your side that knows what he is doing.

It's not 100% confirmed yet and we will post further updates here.

UAE Poised for Global Watchdog’s ‘Gray List’ Over Dirty Money

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.

www.bloomberg.com

 

[Marc Rich]

Shall we say - well deserved?

 

[JohnLocke]

It's more important then ever before to have now a reliable Corporate Service Provider on your side that knows what he is doing.

I'm sure it's not just the UAE but pretty much every country in this world associated with Russian money that is being taken out right now for greater control and more rules.

Therefore it is quite correct, it is more important than ever to have a professional and credible corporate service provider to help.

 

[Marc Rich]

This is evil country with no morals:

UAE suspends visa-free travel for Ukrainians

Gulf state’s decision reflects desire to preserve relationship with Russia

www.ft.com

UAE suspends visa-free travel for Ukrainians​

They very quickly re-instated it.

So Ukrainians are welcome to UAE, visa-free.

 

[uplana]

I do not mind what is going on in the UAE or the rest of the world as long as it helps to combat the chaotic conditions prevailing in Ukraine right now.

 

[Martin Everson]

It's not 100% confirmed yet and we will post further updates here.

UAE Poised for Global Watchdog’s ‘Gray List’ Over Dirty Money

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.

www.bloomberg.com

I would be interested in UAE response if confirmed. It's not end of world and not unexpected.

What is more worrying is the article said:

--- quote start

“Several major legal amendments were recently adopted, including the anti-money laundering law that includes wider powers related to confiscations, as well as controlling virtual assets,” WAM reported, citing Al Zaabi.

---- quote end

 

[Silvio]

“Several major legal amendments were recently adopted, including the anti-money laundering law that includes wider powers related to confiscations, as well as controlling virtual assets,” WAM reported, citing Al Zaabi.

Well to be fair it was always a dictatorship (albeit a benevolent one) so is it really something new that the authorities may confiscate your assets if they want to?

 

[Fred]

Now confirmed.

Financial crime watchdog adds UAE to 'grey' money laundering watch list

Global financial crime watchdog the Financial Action Task Force (FATF) on Friday said Middle East business hub the United Arab Emirates had been included on a list of jurisdictions subject to increased monitoring, known as its 'grey' list.

www.reuters.com

 

[Konstanz]

Now confirmed.

Financial crime watchdog adds UAE to 'grey' money laundering watch list

Global financial crime watchdog the Financial Action Task Force (FATF) on Friday said Middle East business hub the United Arab Emirates had been included on a list of jurisdictions subject to increased monitoring, known as its 'grey' list.

www.reuters.com

in the context of UAE being on Russia side and FATF listing it will be interesting to see how European bank correspondents will act to this.
It could be the start of the end of UAE as financial center

 

[troubled soul]

UAE is placed on money laundering watchdog's 'gray list'

The UAE is the financial hub of the Middle East, home to numerous international companies' headquarters.

www.cnbc.com

UAE is placed on money laundering watchdog’s ‘gray list’​

In February 2022, the United Arab Emirates (UAE) made a high-level political commitment to work with the FATF and MENAFATF to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its MER in February 2020, the UAE has made significant progress across its MER’s recommended actions to improve its system, including by finalising a TF Risk Assessment, creating an AML/CFT coordination committee, establishing an effective system to implement targeted financial sanctions without delay, and significantly improving its ability to confiscate criminal proceeds and engage in international cooperation. Additionally, the UAE addressed or largely addressed more than half of the key recommended actions from the MER.

The UAE will work to implement its FATF action plan by
(1) demonstrating through case studies and statistics a sustained increase in outbound MLA requests to help facilitate investigation of TF, ML, and high-risk predicates;

(2) identifying and maintaining a shared understanding of the ML/TF risks between the different DNFBP sectors and institutions;

(3) showing an increase in the number and quality of STRs filed by FIs and DNFBPs;

(4) achieving a more granular understanding of the risk of abuse of legal persons and, where applicable, legal arrangements, for ML/TF;

(5) providing additional resources to the FIU to strengthen its analysis function and enhance the use of financial intelligence to pursue high-risk ML threats, such as proceeds of foreign predicate offenses, trade-based ML, and third-party laundering;

(6) demonstrating a sustained increase in effective investigations and prosecutions of different types of ML cases consistent with UAE’s risk profile; and (7) proactively identifying and combating sanctions evasion, including by using detailed TFS guidance in sustained awareness-raising with the private sector and demonstrating a better understanding of sanctions evasion among the private sector.

 

[EuroKiss]

If they decide to go fully compliance with western concerns, will be the end of Dubai.

 

[Silvio]

in the context of UAE being on Russia side and FATF listing it will be interesting to see how European bank correspondents will act to this.
It could be the start of the end of UAE as financial center

I don't think it will be the end of the UAE as a financial center.

Just speculating here from what I saw in other jurisdictions:

If I was the EU I would push the UAE to do a directive that will demand that UAE residents show a UAE Tax Residency Certificate to the bank, or be reported to their passport home country through CRS.

This way the legitimate UAE residents keep enjoying 0% tax, whereas the tax dodgers get reported. It wouldn't surprise me if we will see this happening in the next 1-2 years as UAE attempts to get removed from the gray list.

 

[troubled soul]

May be UAE government know this is coming, That's why they introduce 9% tax all of sudden.

 

[calnana]

May be UAE government know this is coming, That's why they introduce 9% tax all of sudden.

Not maybe, they knew. Same thing happened in Malta.

Judging by what happened in other countries the main focus is usually on reporting suspicious transactions (practically non-existent during property purchases) and taking people to court (real action); and making it easy for other countries to get information out of the UAE.

What would suck are limits/bans on cash purchases of certain assets like property.. which make me very hesitant on investing in property.

CRS reporting of residents would also very easy for the UAE to implement if they wanted. Even a dumb dumb approach like checking if people stay here <183 days is possible. Although I'm sure they'd like the income from all the tax residency certificate requests.

I don't see the income tax being 0% as a problem relating to faft. Malta is on course of getting removed from the greylist... it's effective 5% corporate tax hasn't changed yet.

 

[boomy]

Most often in these situations a whole lot is agreed upon, but getting it done is a whole other talk, it takes forever, sometimes years. I remember when we had a similar situation with Seychelles, Belize and BVI - it still took a long time before everything was as agreed several years before.

On the other hand, it can be said that the whole world is on high alert and therefore topics are discussed which can reassure each other but which are never carried out in practice. Now that Putin has stopped the invasion tomorrow, it would take a few days and then everyone would return to the regular agenda, all that panic will quietly go into oblivion.

 

[zzzzzz]

Not maybe, they knew. Same thing happened in Malta.

Judging by what happened in other countries the main focus is usually on reporting suspicious transactions (practically non-existent during property purchases) and taking people to court (real action); and making it easy for other countries to get information out of the UAE.

What would suck are limits/bans on cash purchases of certain assets like property.. which make me very hesitant on investing in property.

CRS reporting of residents would also very easy for the UAE to implement if they wanted. Even a dumb dumb approach like checking if people stay here <183 days is possible. Although I'm sure they'd like the income from all the tax residency certificate requests.

I don't see the income tax being 0% as a problem relating to faft. Malta is on course of getting removed from the greylist... it's effective 5% corporate tax hasn't changed yet.

And what is wrong if people don't stay 183 days in UAE? It's important they don't stay that long in their ex-home/citizenship country.

 

[EuroKiss]

Now that Putin has stopped the invasion tomorrow, it would take a few days and then everyone would return to the regular agenda, all that panic will quietly go into oblivion.

Putin SUSPENDED due to humanitarian reasons - people out of Kiev before the final assault.
Financial and economical situation all over the world will change a lot, I really don’t think we are going to back to “business as usual” anytime soon, and off-shore countries are part of the equation.

 

[calnana]

And what is wrong if people don't stay 183 days in UAE? It's important they don't stay that long in their ex-home/citizenship country.

Nothing wrong, I'm just saying that they have the tools to make the sharing of information better if they want to.

Just because you're reported doesn't mean you're automatically a tax resident of the country you're reported to.

 

[boomy]

Things will change as always. I don't believe it to be final. There are billions of dollars circulating now and in the future, they all need a home. It's just going to be more complicated maybe... black money will always find a home.

 

[Marc Rich]

huge influx of Russians now seeking to relocate to UAE in past week, excellent timing for them