EU Removes UAE from High-Risk Money Laundering List

The EU has removed the UAE from its high-risk money laundering list, recognizing substantial AML/CFT reforms and improved oversight. This move aligns with warming EU-UAE ties and coincides with the launch of bilateral free trade agreement negotiations.

In a move signaling recognition of recent reforms, the European Union has removed the United Arab Emirates (UAE) and seven other jurisdictions from its list of high-risk countries for money laundering. The decision acknowledges the UAE’s intensified efforts to combat financial crime and align with international standards, notably those set by the Financial Action Task Force (FATF).

The update also saw the removal of Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, and Uganda. At the same time, ten jurisdictions were newly added to the high-risk list, including Monaco, Algeria, Angola, Ivory Coast, Kenya, Laos, Lebanon, Namibia, Nepal, and Venezuela—reflecting a shifting global financial compliance landscape.

The revised EU list closely mirrors FATF assessments, which recently cleared the Philippines and added Laos and Nepal to its grey list. Monaco, despite being a wealthy European microstate, has been under increased scrutiny since 2024, alongside EU member states Bulgaria and Croatia.

UAE’s proactive stance on financial oversight

The UAE’s removal follows a high-profile crackdown on financial misconduct. Regulators imposed over AED 339 million (US$92.308 million) in fines on entities including exchange houses, foreign bank branches, and insurers.

The Emirati government has also extended oversight to high-risk sectors such as real estate, gold and jewellery trading, auditing, and corporate services. In addition, collaboration between the UAE Ministry of Economy and Dubai Police has enhanced transparency around beneficial ownership data.

EU Commissioner for Financial Services Maria Luis Albuquerque emphasized the bloc’s alignment with FATF standards and its commitment to safeguarding the EU financial system. The updated list must now pass scrutiny by the European Parliament and member states. If unchallenged, it will formally enter into force within a month.

Monaco, which acknowledged its expected addition to the list, stated its commitment to reforms aimed at regaining compliance and exiting the FATF grey list in the short term.

UAE’s AML framework

The EU’s decision to remove the UAE from its list of high-risk third countries for money laundering and terrorist financing is not merely a diplomatic gesture—it reflects tangible progress made by the UAE in overhauling and enforcing its anti-money laundering (AML) and counter-terrorist financing (CFT) framework.

Over the past several years, the UAE has undertaken a sweeping series of legal and regulatory reforms to strengthen its financial system against abuse. The backbone of this transformation lies in its principal AML/CFT legislation:

• Federal Decree-Law No. (20) of 2018;
• Its amendments under Federal Decree Law No. (26) of 2021;
• Implementing Regulations under Cabinet Decision No. (10) of 2019 and subsequent updates.

These laws have been reinforced through targeted regulations on beneficial ownership (Cabinet Decision No. 109 of 2023), penalties for non-compliance (Resolution No. 132 of 2023), and the application of UN Security Council resolutions on terrorism and proliferation financing.

These reforms are not theoretical. They are operationalized through practical compliance frameworks imposed on both financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs), including real estate agents, lawyers, auditors, dealers in precious metals and stones, and Virtual Asset Service Providers (VASPs). Entities in these sectors are now required to register with the goAML portal, appoint compliance officers, carry out enterprise-wide risk assessments, implement robust customer due diligence procedures, and ensure proper reporting of suspicious transactions.

This rigorous compliance environment has been key to improving oversight and risk mitigation, which did not go unnoticed internationally.

The EU’s recognition of the UAE’s efforts not only facilitates smoother financial relations and reduces the compliance burden for European firms operating in or with the UAE but also bolsters the credibility of the UAE as a trustworthy trade and investment partner.

This is particularly relevant in the context of the newly launched EU-UAE FTA negotiations, where robust financial governance is a prerequisite for deeper economic cooperation.

EU’s evolving stance on the UAE

The decision to remove the UAE from the EU’s list of high-risk countries for money laundering and terrorist financing is the culmination of a longer, politically sensitive process. According to internal European Commission documents, this is not the first attempt to delist the UAE: Brussels had proposed doing so in 2024 following the FATF removal of the UAE from its grey list. However, that proposal was rejected by the European Parliament over concerns about judicial and law enforcement cooperation.

In response to these concerns, the European Commission has since intensified its structural dialogue with the UAE, acknowledging progress and pledging to “closely monitor the implementation of these measures.” This iterative approach underlines the Commission’s responsibility in identifying strategic deficiencies in third countries’ anti-money laundering (AML) and counter-terrorism financing (CTF) regimes.

The UAE had been added to the EU list in March 2023, a designation that carries considerable reputational and financial consequences, including stricter due diligence requirements for EU-based entities, risk of exclusion from the European financial system, and heightened international scrutiny. As of the latest revision, the list includes 22 countries, such as Nigeria, Vietnam, and South Africa, and was last updated in December 2023.

Notably, the renewed push for delisting the UAE coincides with a warming in EU-UAE political and economic relations.

Broader context: EU-UAE Free Trade Agreement talks underway

The timing of the EU’s decision is also notable given the deepening economic ties between the two sides. On May 28, 2025, the EU and the UAE formally launched negotiations for a bilateral free trade agreement (FTA)—the first such initiative between the EU and a Gulf country.

The FTA talks follow an agreement made on April 10 between European Commission President Ursula von der Leyen and UAE President Sheikh Mohamed bin Zayed Al Nahyan. The official launch in Dubai saw EU Commissioner for Trade and Economic Security Maroš Šefčovič and UAE Minister Thani bin Ahmed Al Zeyoudi commit to a roadmap for negotiations, with working-level discussions set to begin in June.

President von der Leyen described the move as a “milestone,” adding that a successful agreement could strengthen cooperation in critical sectors including renewable energy, digital technologies, AI, and green hydrogen, key priorities for both the EU and UAE’s green and digital transitions.

Trade between the EU and the UAE is already significant, with annual goods trade reaching €55 billion and services trade around EUR 39 billion (US$45.19 billion). The UAE is the EU’s first export destination and largest foreign direct investment partner in the Gulf region. EU investment in the UAE now totals EUR 186 billion (US$215.55 billion).

The FTA aims to reduce tariffs on goods and services, and facilitate investment flows in strategic sectors such as healthcare, infrastructure, fintech, and sustainable food systems. While the UAE maintains high tariffs on some items, such as tobacco, wines and spirits, and confectionery, negotiators hope to ease these barriers to strengthen mutual market access.

Also read: EU and UAE Agree to Launch Free Trade Talks: Outlook and Opportunities

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