The Financial Action Task Force (FATF), the Paris-based international watchdog focused on combating money laundering and terrorist financing, has announced plans to reassess the United Arab Emirates (UAE) following disturbing revelations in the Dubai Unlocked report from the Organized Crime and Corruption Reporting Project (OCCRP). The UAE was recently removed from FATF’s “gray list” in February.
The FATF gray list includes countries under increased monitoring for deficiencies in their anti-money laundering (AML) and counter-terrorism financing (CTF) regimes. However, the investigative findings by OCCRP, detailed in their “Dubai Unlocked” report, have prompted FATF to revisit this decision.
The “Dubai Unlocked” investigation exposed how convicted criminals, fugitives, and individuals under sanctions have been able to purchase property in Dubai. This raises significant concerns over the effectiveness of the UAE’s regulatory frameworks in preventing money laundering activities within its borders, particularly in the real estate sector. The report also highlighted practices among Dubai real estate agents, who often encourage cash transactions and seldom inquire about the origins of the funds, a direct contravention of FATF standards.
FATF President Raja Kumar, in an interview with OCCRP’s partner E24, acknowledged the importance of these findings and confirmed that FATF would incorporate this public information into their next evaluation of the UAE. He emphasized the collective responsibility of lawyers, accountants, real estate agents, and other service providers in ensuring compliance with AML and CTF regulations.
The 2020 FATF report already identified the UAE as a hotspot for illicit financial flows, citing the country’s attractiveness to criminal enterprises that exploit its economic infrastructure to launder money. Despite this, the FATF noted significant improvements by the UAE in enhancing its legal frameworks and enforcement measures, which led to its removal from the gray list earlier this year.
However, critics and international observers remain skeptical. Following the release of the “Dubai Unlocked” report, several EU parliamentarians and global anti-corruption activists have voiced concerns over the premature delisting of the UAE. According to Suliman Baldo, director of the Sudan Transparency and Policy Tracker, the UAE’s financial systems have been implicated in exacerbating conflicts in Sudan and other regions by facilitating the laundering of proceeds from smuggled gold.
The UAE has responded to these accusations through its embassies, stating a firm commitment to upholding the integrity of the global financial system and asserting that they take their role very seriously.
The global community is watching closely as FATF prepares to reassess the UAE’s compliance with international financial security standards. The outcome of this reassessment will affect the UAE’s international standing and test the credibility and effectiveness of FATF’s regulatory mechanisms.
