The United Arab Emirates (UAE) has officially been removed from the European Union’s list of high-risk countries for money laundering. This decision reflects the country’s significant progress in strengthening its financial regulatory framework and improving transparency.
This development follows the UAE’s earlier removal from the Financial Action Task Force (FATF) grey list in February 2024. The European Parliament approved the UAE’s removal from the high-risk list in June 2025, and the decision came into effect in early July.
Background: From Scrutiny to Reform
In 2022, FATF added the UAE to its grey list due to weaknesses in anti-money laundering (AML) and counter-terrorist financing (CFT) systems. Subsequently, in 2023, the EU also categorized the UAE as a “high-risk third country”, triggering enhanced due diligence measures for EU-based financial institutions dealing with UAE-linked entities.
In response, the UAE launched a comprehensive reform strategy aimed at strengthening compliance and oversight. The measures included:
- Updating AML and CFT laws and enforcement policies
- Requiring better transparency around beneficial ownership
- Expanding oversight across high-risk sectors such as real estate, gold trading, and virtual assets
- Issuing substantial penalties to banks and exchange houses for non-compliance
- Enhancing coordination between financial authorities and law enforcement
These reforms led to a re-evaluation by both FATF and the EU, ultimately resulting in the UAE being delisted from both watchlists.
Impact on UAE’s Business and Global Standing
The removal from the EU’s high-risk list has immediate and long-term benefits for the UAE.
First, it reduces regulatory burdens for businesses engaged in cross-border financial transactions with Europe. EU-based banks and institutions are no longer obligated to apply additional scrutiny to UAE-related financial activities, thereby cutting costs and delays.
Second, the decision enhances the UAE’s reputation among global investors. Past data indicates that countries removed from the FATF grey list often experience a rise in foreign direct investment and improved economic performance.
Third, this regulatory upgrade is expected to positively influence ongoing trade and financial negotiations between the UAE and the European Union, potentially leading to stronger economic partnerships.
Ongoing Oversight and the Path Forward
European officials have made it clear that the UAE must continue to maintain and enforce its new standards. Being removed from the high-risk list does not mean the end of scrutiny, but rather marks the beginning of a new phase of continuous improvement and compliance monitoring.
UAE leaders acknowledged the significance of the milestone. Minister of State Mohamed bin Hadi Al Hussaini described the move as a reflection of international confidence in the UAE’s financial system, while emphasizing the importance of staying aligned with evolving global standards.
Conclusion
The UAE’s successful exit from the EU’s high-risk list is not just a regulatory achievement—it represents a strategic transformation in the country’s approach to financial governance. As the global spotlight shifts to long-term compliance and enforcement, the UAE now stands as a stronger, more credible financial hub committed to integrity and reform.
