The UAE achieved a massive milestone in its efforts to combat financial crime, last week.
The Financial Action Task Force (FATF), an international body comprising countries from around the world dedicated to tackling financial crime, recently made the decision to remove the UAE from its financial crime watch list.
While this development highlights the UAE’s continuous commitment to enhancing its anti-money laundering and counter-terrorism financing measures, it is also expected to boost the nation’s economic growth, especially in the real estate sector.
“The UAE’s removal from the FATF’s grey list will be a catalyst for increased economic growth across the UAE, with Dubai real estate set to benefit with immediate effect,” Lewis Allsopp, Chairman of Allsopp & Allsopp told Arabian Business.
Dubai to see ‘increase’ in foreign direct investment
Following the country’s removal from the FATF’s financial crime watch list, an increase in direct foreign investment is expected, Allsopp said, which will particularly led by large institutional funds.
Previously, these funds were restricted from entering the Dubai property market due to the country’s former ‘grey rating’, he added.
“I am confident that Dubai’s real estate market is set to benefit the most from this news. In 2023, more homes priced at over $10 million were sold in Dubai than in any other city in the world. In 2024 our teams recorded an increasing number of Global CEOs, Institutional Fund Managers and HNWIs relocating to Dubai, buying properties across exclusive residential communities such as Al Barari, Jumeirah Golf Estates, The Palm and Dubai Hills. I predict that global institutional investors will find Dubai’s large, single-owner commercial and residential developments simply irresistible in 2024,” he said.
Abu Dhabi Global Market (ADGM) congratulates UAE
With the Emirates being dropped from the FATF grey list, the international financial centre Abu Dhabi Global Market (ADGM), congratulated the government of the UAE and the Higher Committee Overseeing the National Strategy for Anti-Money Laundering and Countering Terrorism Financing.
The committee, chaired by Sheikh Abdullah bin Zayed Al Nahyan, Minister of Foreign Affairs, UAE, received praise for FATF’s decision to remove the UAE from the list of countries under enhanced due diligence due to concerns regarding anti-money laundering and countering the financing of terrorism.
“FATF’s decision stands as a testament to the remarkable progress the country has made over the past two years in addressing its anti-money laundering (AML) and counter-terrorist financing (CTF) measures,” ADGM added.
Moreover, ADGM expressed its commitment to continue collaborating with the Executive Office of Anti-Money Laundering and Counter-Terrorism Financing, the Central Bank of the UAE, and other key stakeholders in fortifying the AML/CTF framework.
This collaboration aims to align with the UAE’s national risk assessment initiatives and safeguard the integrity of the country’s financial ecosystem through enhanced policies, procedures, and controls to effectively manage the risks of money laundering and terrorist financing.
However, the UAE’s fight against financial crime ‘isn’t over’
While the country’s removal from the FATF grey list is a big win, its fight against financial crime isn’t over, according to Mohamed Daoud, Industry Practice Lead at Moody’s Analytics.
“It is crucial for long-term progress that it maintains its robust AML/CFT regime – especially with the next round of rigorous FATF evaluations approaching in 2026,” he said adding that this announcement will further boost trust in the UAE’s financial system.
He added that this could lead to smooth foreign currency, lower inter-bank fees, and increased trade and investment.
“Even so, don’t expect the international compliance community to immediately change the way it interacts with the country. It takes time for foreign institutions to update their anti-money laundering and counter-terrorist financing (AML/CFT) measures, so the full benefits may lag behind the official announcement. Think of it as a gradual thawing, not an instant spring.
“Specific actions by the UAE, reactions from other nations and financial institutions, and even global geopolitical shifts will all influence the size of the benefits. There are exciting possibilities but it’s a nuanced and multifaceted story,” he concluded.
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