FATF Mutual Evaluation Reports: The Current Status of All Six GCC Countries

How the FATF Mutual Evaluation Process Works

The FATF mutual evaluation process involves an on-site assessment by FATF or FATF-style regional body assessors, followed by a detailed report that evaluates compliance with each of the 40 FATF Recommendations using four technical compliance ratings: compliant, largely compliant, partially compliant, and non-compliant. A separate effectiveness assessment evaluates the extent to which the AML/CFT system is producing results, using four ratings: high, substantial, moderate, and low.

Countries identified as having strategic AML/CFT deficiencies are placed on the FATF grey list, which means they are subject to increased monitoring and must produce a high-level action plan with specific commitments and deadlines. Countries that do not make sufficient progress may be placed on the black list.

The FATF reviews grey-list countries regularly and publishes statements following each plenary meeting. The Gulf states are also covered by the FATF Middle East and North Africa (MENA) group’s activities.

United Arab Emirates: MER and Current Status

The UAE underwent its FATF mutual evaluation in 2019. The evaluation report identified areas of strength including good cooperation between law enforcement agencies and financial intelligence, and effective use of financial intelligence by authorities. The report also identified significant deficiencies, particularly in the areas of beneficial ownership transparency, supervision of DNFBPs, and preventive measures for designated non-financial businesses and professions.

Following the MER, the UAE was placed on the FATF grey list in February 2020 and developed a high-level action plan. The UAE has made significant efforts to address its action plan items, including legislative reforms to the AML Law, establishment of beneficial ownership registries, and enhanced supervisory activity.

The UAE’s progress was recognised by FATF, and the country was removed from the grey list in February 2024. However, the compliance obligations established by the UAE’s MER findings remain relevant for financial institutions operating in the UAE. The deficiencies identified, particularly in DNFBP supervision and beneficial ownership, continue to shape the regulatory landscape.

The DFSA has published thematic reviews and supervisory priorities for entities in the Dubai International Financial Centre that reflect the MER findings and the ongoing focus on AML/CFT effectiveness.

Saudi Arabia: MER and Action Plan Progress

Saudi Arabia underwent its FATF mutual evaluation with findings published in 2022. The MER identified a number of areas where Saudi Arabia has a solid legal and institutional framework, including strong legal powers for law enforcement agencies and good understanding of AML/CFT risks at the national level. The report also identified deficiencies, particularly in the effective implementation of beneficial ownership measures, the supervision of some DNFBP sectors, and the timeliness of suspicious transaction reporting.

Saudi Arabia was placed on the FATF grey list following the MER and has committed to an action plan. SAMA and the Saudi Arabian Monetary Authority have responded with enhanced supervisory expectations, revised AML/CFT rules, and increased enforcement activity. The progress made by Saudi Arabia against its action plan has been subject to FATF review at successive plenary meetings.

The Saudi Vision 2030 programme has influenced the financial crime risk landscape significantly. The expansion of the financial services sector, the development of new financial centres, and the increase in cross-border activity have all created new compliance challenges and heightened the importance of an effective AML/CFT framework.

Financial institutions regulated by SAMA should monitor FATF’s statements on Saudi Arabia’s progress and ensure their compliance programmes reflect the current regulatory expectations.

Bahrain: MER Findings and Current Status

Bahrain underwent its FATF mutual evaluation with findings published in 2018, with a follow-up report published subsequently. The MER assessed Bahrain’s legal and institutional framework for AML/CFT and evaluated the effectiveness of the system.

Bahrain has a well-developed financial centre with a significant offshore banking sector. The MER findings for Bahrain reflect both the strengths of this mature financial centre and the challenges associated with supervising a diverse range of financial institutions and DNFBPs.

The specific findings and ratings for Bahrain’s MER should be verified against the published FATF report. The Central Bank of Bahrain has issued guidance reflecting the MER findings and has updated its AML/CFT module to align with FATF requirements.

Bahrain’s position as a regional financial centre means that its MER findings have implications for financial institutions and professional services firms operating in the Gulf more broadly.

Qatar: MER Status

Qatar underwent its FATF mutual evaluation with the report published in 2019. The evaluation assessed Qatar’s compliance with the FATF 40 Recommendations and the effectiveness of its AML/CFT system.

Qatar was placed on the FATF grey list following its MER and was removed from the grey list in 2019, reflecting FATF’s assessment of the progress made on its action plan items.

The Qatar MER identified strengths in the legal framework, particularly the powers of the Qatar Financial Information Unit and the coverage of money laundering offences. The report also identified areas requiring improvement, including the supervision of DNFBPs, the implementation of targeted financial sanctions, and beneficial ownership requirements.

Qatar has engaged with FATF on its MER findings and has implemented reforms to address identified deficiencies. The Qatar Financial Centre Regulatory Authority has issued updated AML/CFT rules for entities in the Qatar Financial Centre.

For financial institutions operating in Qatar or dealing with Qatari counterparties, the specific MER findings and subsequent reforms are relevant to understanding the current compliance expectations.

Oman: MER and Action Plan

Oman’s FATF mutual evaluation was conducted with the MER published in 2022. The report assessed Oman’s compliance with the FATF 40 Recommendations and the effectiveness of its AML/CFT framework.

Oman has been working to address the deficiencies identified in its MER, including improvements to its legal framework, the establishment of a more comprehensive beneficial ownership regime, and enhanced supervisory activity for financial institutions and DNFBPs.

Oman has been subject to FATF monitoring and has developed an action plan to address identified deficiencies. Progress against the action plan has been reviewed at FATF plenary meetings.

The specific MER ratings and action plan items for Oman should be verified against the current FATF statement on Oman.

Kuwait: MER Status

Kuwait’s FATF mutual evaluation status should be verified against current FATF statements. The evaluation process for Kuwait has been underway and FATF periodically updates the status of all member countries at its plenary meetings.

Financial institutions operating in Kuwait should monitor FATF announcements and ensure their compliance programmes are aligned with the current regulatory expectations in Kuwait.

FATF Grey List: Implications for GCC Financial Institutions

For financial institutions and DNFBPs operating in GCC countries that are on the FATF grey list or are working to address MER findings, the implications are practical and operational.

Enhanced supervisory scrutiny is the first implication. Supervisors in grey-list countries typically increase the intensity of their AML/CFT supervision, including more frequent examinations, targeted thematic reviews, and enhanced reporting requirements.

Compliance programme expectations increase in parallel. Financial institutions are expected to ensure their AML/CFT programmes are fully effective, not merely compliant on paper. This includes the quality of suspicious transaction reporting, the effectiveness of transaction monitoring, the adequacy of customer due diligence, and the completeness of record-keeping.

Reputational considerations arise in correspondent banking and trade finance. Correspondent banking relationships may be subject to enhanced due diligence by counterparties in other jurisdictions, and institutions in grey-list countries may face additional questions from correspondent banks about their compliance programmes.

Beneficial ownership has been a consistent deficiency across GCC MERs. Financial institutions must ensure their beneficial ownership collection and verification processes meet the standard expected by FATF, which requires that beneficial ownership information be accurate, adequate, and accessible to authorities.

The FATF 40 Recommendations: A Framework Overview

The FATF 40 Recommendations provide the international standard against which all mutual evaluations are conducted. For GCC compliance professionals, familiarity with the full framework is essential, though certain recommendations are particularly relevant given the common findings across GCC MERs.

Recommendation 10 requires customer due diligence, including identification and verification of customers and beneficial owners.

Recommendation 11 requires ongoing due diligence and scrutiny of transactions.

Recommendation 12 addresses politically exposed persons and requires enhanced due diligence for PEPs.

Recommendation 20 covers suspicious transaction reporting.

Recommendation 24 addresses beneficial ownership of legal persons and requires countries to ensure that adequate, accurate, and timely beneficial ownership information is available.

Recommendation 26 covers the regulation and supervision of financial institutions under a risk-based approach.

Recommendation 27 requires authorities to monitor financial institutions for AML/CFT compliance.

These recommendations are transposed into national legislation in each GCC country. Financial institutions must understand how these obligations are implemented in their specific jurisdiction.

Conclusion

The FATF mutual evaluation process is the defining framework for AML/CFT compliance in the Gulf. Every GCC country has been assessed, every country has areas of strength and areas requiring improvement, and every country is subject to ongoing FATF monitoring to some degree.

For compliance professionals, the practical implication is that awareness of MER findings is not optional. The deficiencies identified in each country’s MER shape the supervisory priorities of the domestic regulator, which in turn shape the compliance obligations of every financial institution and DNFBP in that jurisdiction.

The common themes across GCC MERs, including beneficial ownership transparency, DNFBP supervision, and the quality of suspicious transaction reporting, indicate where GCC compliance programmes should focus their attention. The FATF Recommendations provide the international standard. The MER findings provide the specific gaps that each country and each institution must address.

This article was accurate at the time of publication in August 2026 and is intended for general informational purposes only. It does not constitute legal, regulatory or compliance advice. Organisations should seek qualified professional guidance in relation to their specific obligations.