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To enable trade relations, Israel must first remove UAE banks from its blacklist

The Israel Money Laundering and Terror Financing Prohibition Authority currently classify the UAE as a high-risk country due to money laundering and terror financing concerns

Irit Avisar 11:0502.09.20

Israel's financial team on the delegation that is visiting Abu Dhabi has signed a memorandum of understanding to partner with the United Arab Emirates to promote financial agreements between Israeli regulators, the Ministry of Finance and the Central Bank of the United Arab Emirates. The ultimate goal is to reach an agreement that will allow the transfer of money directly between the two countries, as well as exchange currencies, stock trading and more. As of now, these transactions between the countries require the brokering of a foreign bank. The main challenge in reaching such an agreement is Israel's anti-money laundering regulations.

The Israel Money Laundering and Terror Financing Prohibition Authority (IMPA) currently classifies the UAE as a high-risk country due to money laundering and terror financing concerns. In order to promote cooperation between the countries, the IMPA will need to take the UAE off the list, which is expected to be completed without any special issue.

The Jebel Ali commercial hub in Dubai. Photo: Jafza

In the meantime, according to the MoU, Israel and the UAE will set up a joint committee to promote partnerships in finance and investment, which will include the removal of obstacles, joint investments in stock markets and collaboration in banking services and the payments sector.

Israel's financial team to Abu Dhabi was led by Shira Greenberg, the Chief Economist in the Ministry of Finance, and Yair Avidan, Supervisor of Banks at the Bank of Israel.

The delegation of Israeli and U.S. officials arrived in Abu Dhabi on Monday on the first-ever direct commercial flight conducted by Israel's flag carrier El Al to the Gulf state. The delegation, which returns on Wednesday, met with UAE officials to discuss the details of the historic peace deal between the two countries announced earlier in August.