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UAE becomes observer in Asian money laundering group

The move follows the UAE being added to a financial watchdog’s list of countries with deficiencies in countering money laundering.
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The United Arab Emirates announced on Wednesday it achieved observer status in an Asian anti-money laundering group as the Gulf state seeks to boost its compliance on the issue following scrutiny.

The UAE was granted observer status in the Asia/Pacific Group on Money Laundering. As such, the UAE will participate in the group’s forum being held in Vancouver, Canada, the official Emirates News Agency reported.

The forum began on Sunday and will conclude on Friday, according to the Asia/Pacific Group. The organization did not immediately confirm the UAE has been granted observer status.

The UAE’s delegation to the forum will be led by Hamid Al Zaabi, who heads the Executive Office of Anti-Money Laundering and Counter-Terrorism Financing, according to the Emirates News Agency.

What it means: The Asia/Pacific Group on Money Laundering was established in 1997 as a “regional body” of the Paris-based Financial Action Task Force. Both organizations work to fight money laundering as well as the financing of terrorism and proliferation.

The Asia/Pacific Group has members across Asia, including China, Japan and South Korea. The United States is also a member. Observers of the group include the United Kingdom, France, Germany and North Korea.

Why it matters: The UAE was named to the Financial Action Task Force’s “grey list” in 2022. The list denotes countries that are working to address “strategic deficiencies” with regard to money laundering and illicit financing, Agence France-Presse reported at the time.

The Gulf state has been implicated in a number of money laundering, sanctions busting and related scandals in recent years. In April, British authorities said they dismantled a criminal ring that smuggled more than $100 million to the UAE from the UK.

In June, the US Treasury Department sanctioned the Dubai-based Industrial Resources General Trading for allegedly providing financial support to the Russian Wagner mercenaries.

Emirati entities have instituted several measures in the past year to crack down on money laundering and related offenses. In January, the UAE Central Bank issued new guidance on money laundering and terrorism financing.

The UAE remains on the Financial Action Task Force’s grey list nonetheless. Jordan and Syria are also on the list. For comparison, Iran is on the “black list,” which denotes countries with "serious strategic deficiencies,” according to the task force’s website.

The Financial Action Task Force released a report on the UAE’s efforts to counter money laundering last week. The report noted the UAE improved its risk assessment, among other areas, but is still not fully compliant with all of the task force’s recommendations.

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