Ratings agency S&P said that the placement of the UAE on FATF’s increased monitoring list, also known as the grey list, is “unlikely to be a significant blow to the country’s economy.”
The Financial Action Taskforce (FATF), a global financial watchdog, placed the country on the list on Saturday.
The firm believes that the listing is unlikely to significantly affect the UAE “because it is a net exporter of capital to the rest of the world and not dependent on external funding.”
For corporates, the agency says that as companies secure most of their lending from the domestic banking system, any additional costs that will come from external debt capital markets will be limited.
“We expect the UAE’s implementation of corporate tax, starting 2023, to increase surveillance and transparency of corporates’ performance and funding sources,” the firm said.
Similarly, S&P believes that the grey listing will also not significantly disrupt the country’s banking sector, with UAE banks possessing “ample margins” to withstand any cost increases.
During the announcement, FATF noted that the UAE had already “significantly strengthened” its anti-financial crime framework.
S&P also noted that over the past few years the UAE had implemented reforms aimed at increasing the supervision of the real estate and precious metals dealers.
“The UAE takes its role in protecting the integrity of the global financial system extremely seriously and will work closely with the FATF to quickly remedy the areas of improvement identified,” the UAE’s Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism said in a statement carried by WAM.
“On this basis, the UAE will continue its ongoing efforts to identify, disrupt and punish criminals and illicit financial networks in line with FATF’s findings and the UAE’s National Action Plan, as well as through close coordination with our international partners.”
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