After the UAE was placed on the FATF’s "grey list" due to findings of deficiencies in its AML, CTF and sanctions compliance, already by June 2023 the FATF recognized in its interim assessment the UAE's significant progress following reforms, noting improvements in mutual legal assistance requests, enhanced capabilities of the Central Bank’s Financial Intelligence Unit and a notable increase in effective investigations and prosecutions. The UAE reported a conviction rate of 92.1% for money laundering cases and confiscated over AED 1.3 billion related to AML/CTF activities.
Increased enforcement activities were observed in 2023, with a substantial rise in suspicious transaction reports and fines imposed on financial institutions. The UAE has also prioritized regulatory protections for whistleblowers.
Legislative developments include new cybersecurity rules and expanded data protection laws, alongside comprehensive regulations for virtual assets initiated in early 2023. For example, UAE Cabinet Decision No. 111 of 2022 established a comprehensive regulatory framework for virtual assets at the federal level, covering all virtual asset services providers (VASPs) in the UAE, except for the DIFC and ADGM. Its objectives include developing a legislative system for the sector, ensuring VASPs comply with AML and CTF regulations, attracting international investment, and protecting investors and consumers. The implementation of a federal corporate tax in 2022 has introduced penalties for non-compliance. And cross-border cooperation has strengthened, with numerous mutual legal assistance requests exchanged.
The UAE is expected to enhance enforcement and regulatory frameworks, particularly in whistleblowing and compliance areas.