Progress Applauded in the UAE’s Efforts to Stamp Out Financial Crime

11 July 2023

Over the past month the Financial Action Task Force (FATF) has underscored the UAE’s progress to stamp out financial crime in the country. In its newly published third enhanced follow-up report (FUR), the international watchdog upgraded three of its recommendation ratings for the UAE.

This comes on the heels of FATF also recognising progress made by the UAE in its FATF action plan to improve aspects identified during the organisation’s greylisting of the country. FATF highlighted strides made towards enhancing and maintaining a shared understanding of money laundering and terrorist financing risks across the UAE’s DNFBPs (FATF’s technical term for many businesses outside the financial services sector), a key step needed for ensuring financial crime is addressed at all levels of the economy.

The Executive Office of AML/CFT, established in 2021, oversees the implementation of the UAE’s National AML/CFT Strategy and National Action Plan (NAP), the programme of work designed to strengthen the UAE’s anti-financial crime system. The establishment and initiatives to date of the Executive Office reflects the country’s commitment to understanding financial crime risks and strengthening both public and private sector response to these risks.

In the FATF’s recent report, ratings on three of the UAE’s FATF Recommendations were upgraded from ‘partially compliant’, with Recommendations 19 and 29 upgraded to ‘compliant’ and Recommendation 1 upgraded to ‘largely compliant’. Overall, the report found that the UAE has implemented new legislation and internal work procedures that have effectively improved the Financial Intelligence Unit (FIU)’s operational capabilities, resulting in an increased number of suspicious transactions reports (STRs) analysed by the FIU over the last year.

Moreover, the report noted that the country has made significant progress towards improving its risk assessment processes, notably conducting eight sectoral assessments and developing a nation-wide action plan aimed at mitigating risks in the highest risk sectors, including precious metals and stones. Assessors also applauded the improvement in the UAE’s countermeasures aimed at effectively managing high risk countries.

This recognition by FATF comes as the UAE concludes hosting the annual Egmont Group Plenary, which facilitates and prompts the exchange of information and cooperation amongst member FIUs. One of the key themes of the Plenary was how digital technologies can be used to fight financial crime and enhance the operational capacities of FIUs globally, such as using information technology to enhance the exchange of information.

The UAE has been a trailblazer in harnessing innovation and technology to fight financial crime, with both the public and private sectors committed to building stronger awareness of financial crime risks and developing practical tools to combat these risks. One example of this work is the UAE government’s support for developing a toolkit to help financial institutions combat financial flows related to the illegal wildlife trade, bringing awareness to an under-appreciated but highly lucrative and significant international criminal enterprise. The toolkit was developed by Themis, the UK Serious and Organised Crime Network and the UAE Executive Office of AML and CTF, in collaboration with WWF and TRAFFIC, and launched in March 2022 during Expo Dubai.

As a home-grown UAE financial crime specialist, Themis is at the forefront of analysis of the UAE's financial crime risk landscape, providing our clients with practical tools and research to fight financial crime in the region. Furthermore, through our compliance outsourcing licence and work, we’ve seen first-hand the positive drive and engagement across financial institutions, DNFBPs, and public sector bodies to drive financial crime out of the country and protect individuals and businesses alike.

Recent research that we have carried out in this space includes:

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