The Financial Action Task Force, Paris-based, made Friday’s decision to place the UAE, which is home to Dubai, and Abu Dhabi, oil-rich, on a 23-country list that includes fellow Mideast countries Jordan, Syria, and Yemen.
Although it is unlikely that the Emirates will impact business, which are a federation seven sheikhdoms located on the Arabian Peninsula, home to many economic free zones and real-estate ventures, it could affect the country’s business-friendly image. Rating agencies and other financial institutions can also view such a listing negatively, which could affect interest rates on loans.
FATF praised the UAE’s “significant achievements” but said that more needs to be done. The UAE already has a corporate registry and has signed extradition agreements.
The UAE has long been known for being a destination where valuables such as gold, diamonds and cash can be transported into and through. The State Department has described “bulk cash Smuggling” in the Emirates as a “significant problem” in recent years.
The Center for Advanced Defense Studies in Washington, which relied on leaked Dubai property data, concluded that war profiteers and terror financiers, as well as drug traffickers, had used Dubai’s boom-and–bust real estate market to shelter their money .
Twitter users and the state-run WAM news agency were quick to assure investors that the UAE was safe and regulated and would address international concerns.
“The UAE will continue to its ongoing efforts in identifying, disrupt and punishing criminals and illicit financial network, in line with FATF’s findings and the UAE’s National Action Plan as well as through close cooperation with our international partners,” said the Emirates’ Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism.
Anwar Gargash, a senior Emirati diplomat, wrote on Twitter that the country had made “significant progress in fighting financial crime.”
He wrote that “Being a major economic hub, it is important to continue to strengthen strategic cooperation with our partner in order address this global problem.”
