UAE expects a swift deal with EU on tax blacklist

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UAE expects a swift deal with EU on tax blacklist
Abdul Aziz Al Ghurair, chairman of the UAE Banking Federation and CEO of Mashreq Group.

Dubai - New Emirates Interbank Offered Rate to be implemented in the coming years

By Waheed Abbas

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Published: Wed 13 Mar 2019, 9:00 PM

Last updated: Wed 13 Mar 2019, 11:12 PM

The UAE expects to reach an amicable solution with the European Union (EU) soon on the issue of its inclusion in the list of non-cooperative jurisdictions for tax purposes, said a senior UAE banking official.
"We need to reach out. I understand the reasons, and I'm sure the UAE will want to play as a global citizen. I am sure this issue will be solved in the near future. It was due to lack of communication and lack of understanding. The EU will be approached and (the issue will be) discussed; I'm sure there will be a way out," said Abdul Aziz Al Ghurair, chairman of the UAE Banking Federation and CEO of Mashreq Group.
"Because we have chosen to be an international financial centre, so we have to comply with world regulations. We had issues like this in the past and were solved," Al Ghurair told media on the sidelines of a banking conference in Dubai on Wednesday.
The UAE on Wednesday regretted the EU's decision to include it on a list of non-cooperative jurisdictions for tax purposes. This inclusion was made despite the UAE's close cooperation with the EU on this issue and ongoing efforts to fulfil all the EU's requirements, Wam said in a statement.
The UAE said it had shared with the EU a detailed timeline of actions that it is currently implementing in accordance with its sovereign legal process and constitutional requirements. Media reports said Italy and Estonia had opposed the UAE's inclusion in the list.
"Be it Saudi Arabia, the UK, the US, Europe or Far East, the UAE will have to comply with every single regulatory regime in the world," said Al Ghurair.
"We have to comply with all international regulation. We have a regulation here for money-laundering and there are regulation in Europe and the US. We have to comply with all those regulations, but these regulations keep on changing every day. And corresponding banks don't update us with new legislations. So, there is a challenge to remain up-to-date with such regulations. Anti-money laundering programme takes almost a year or two to be implemented. By then, the regulations have already changed," Al Ghurair said while addressing the BAFT Mena Bank to Bank 2019 Forum in Dubai. "If there are gaps with regard to anti-money laundering, there is no choice for the UAE but close the gaps."
UAE Banking Federation chairman revealed that there will be a new Emirates Interbank Offered Rate (Eibor) to be implemented in the coming years due to changes in London Interbank Offered Rate (Libor).
"There will be more changes in the next two years in Eibor because of changes in Libor setting. Our Eibor was set on the existing Libor mechanism. It is very transparent methodology we have in terms of compliance, technology, audit etc. But now the world standard has changed, so we have to adjust our Eibor in the UAE," said Al Ghurair.
Used as a price reference in financial contracts and derivatives worth $350 trillion globally, Libor reflects borrowing costs among banks and is based on quotes submitted by lenders.
The UAE banking federation has also asked the central bank to have an audit firm which will continuously audit and help in rate setting.
Al Ghurair said most of the bank mergers that took place in the UAE were within each emirate.
"We would love to see inter-emirate banking mergers. And that would be a good sign when shareholder see benefit in that kind of merger. Most of the mergers have taken place only within each emirate. 50 per cent of one shareholder decided to merge, so they made it happen. The synergy is cost-cutting only and they are not offering anything new to clients," he added.
- waheedabbas@khaleejtimes.com 
 
 


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