UAE dropped from FATF’s financial crime Watch List | Current Affairs | Vision IAS
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    UAE dropped from FATF’s financial crime Watch List

    Posted 26 Feb 2024

    Updated 27 Mar 2024

    2 min read

    • At the recently held Financial Action Task Force (FATF) plenary meeting, UAE was confirmed to have been dropped from its ‘Jurisdictions under Increased Monitoring’ (Grey list).
      • Additionally, Gibraltar, Barbados, and Uganda have also been removed from FATF’s Grey List.
      • Kenya and Namibia have been added to the Grey List.

     

    • FATF’s Black and Grey Lists
      • FATF publicly lists countries with weak measures to combat Money Laundering (ML) and Terrorist Financing (TF) regimes in two documents:
        • High-Risk Jurisdictions subject to a Call for Action (i.e. "Black List"): Jurisdictions with serious strategic deficiencies to counter ML, TF, and proliferation financing.
        • Grey List: Jurisdictions with strategic deficiencies in their regimes to counter ML, TF, and proliferation financing. 
      • Currently, there are only 3 countries (Democratic People’s Republic of Korea, Iran, and Myanmar) in FATF Black List.

     

    • Significance of UAE’s removal from Grey List for India
      • Boost to investment in Indian Non-Banking Financial Companies (NBFCs).
        • A 2021 Circular from RBI stated that “investments in NBFCs from FATF non-compliant jurisdictions shall not be treated at par with that from the compliant jurisdictions.”
      • Reduced compliance cost and cost of funding for financial institutions and individuals operating in UAE.

     

    About FATF

    • Established in 1989 by G7 countries to combat money laundering.
    • In 2001, its mandate was expanded to also combat terrorist financing. 
    • Since 2019, FATF has had an open-ended mandate, after originally operating under fixed-terms.
    • Member Countries: 39, including India.
    • India was admitted in 2010 as 34th member.
    • Tags :
    • UAE
    • Money Laundering
    • Financial Action Task Force
    • Terrorist Financing
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