EU clears UAE from high-risk AML list: Boon for businesses, trade, investments

Dubai: In a landmark decision, the European Parliament approved removing the UAE from the EU’s list of high-risk countries for anti-money laundering (AML) and counter-terrorism financing (CFT) – and this is expected to ease compliance, speed up financial transactions, and boost investor confidence.

Until now, UAE-based firms faced stricter scrutiny from EU financial institutions. These enhanced due diligence rules caused delays, increased paperwork, and raised costs for cross-border transactions.

With this requirement lifted, financial flows between the UAE and Europe can soon happen faster and more affordably, benefiting sectors that depend on smooth global connections, such as banking, FinTech, and trade finance.

According to the International Monetary Fund, countries removed from international high-risk lists often see capital inflows of up to 7.6% of their GDP. Foreign direct investment alone may increase by about 3%.

In simpler terms, delisting can make a country more attractive to global investors, resulting in more money entering the economy and greater access to international financial networks.

The European Parliament’s decision reflects growing confidence in the UAE’s financial reforms and enforcement measures.

It follows a recommendation by the European Commission, and comes more than a year after the Financial Action Task Force (FATF) removed the UAE from its grey list in February 2024.

In parallel, the UAE Central Bank has intensified its crackdown on non-compliant financial institutions. Over the past few months, nearly Dh350 million in fines have been issued for violations of anti-money laundering and terrorism financing rules.

Recent enforcement actions include Dh200 million and Dh100 million fines imposed on two exchange houses, while additional penalties were also issued to other local exchange firms and insurance companies.

The Central Bank separately revoked the licence of one exchange house and imposed a Dh10 million fine for breaches of anti-money laundering laws.

In the banking sector, a Dh5.9 million fine was issued to a branch of a foreign bank, while two other international banks operating in the UAE were fined a combined Dh18.1 million for compliance failures.

The sweeping actions signal the UAE’s commitment to enforcing compliance and upholding international financial standards.

Khaled Mohamed Balama, Governor of the UAE Central Bank and Chairman of the National Committee for Anti-Money Laundering, described the EU’s decision as a reflection of the UAE’s “forward-looking national vision” and the country's ongoing efforts to build a safe, competitive, and well-governed financial ecosystem.

The CBUAE governor further noted that addressing risks to the financial system remains a national priority and acknowledged the cooperation of regulators, financial institutions, and the private sector in supporting this progress.

Enforcement is just one part of the UAE’s overhaul. In 2023, the government introduced the 2024–2027 National Strategy for Anti-Money Laundering and Countering the Financing of Terrorism, built on 11 core objectives.

These reforms focus on risk-based supervision, effectiveness, and building long-term resilience in the financial system.

Oversight has also expanded beyond banks to include sectors often considered higher risk globally — such as real estate, gold and jewellery trading, auditing, and corporate service providers.

To further strengthen monitoring, the UAE’s Ministry of Economy is working closely with Dubai Police to improve data sharing and track beneficial ownership — identifying the real individuals behind company structures and financial transactions.

The delisting also comes at a time of deeper economic engagement between the UAE and the European Union, with both sides recently agreeing to launch free trade negotiations.

Ahmed bin Ali Al Sayegh, Minister of State for Foreign Affairs, described the move as “independent recognition” of the UAE’s efforts to protect the integrity of the global financial system and its standing as a trusted international hub.

Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs, highlighted that this milestone will boost investor confidence, attract continued investment, and reinforce the UAE’s standing as a trusted global financial hub.

Alongside the UAE, the European Parliament also cleared Barbados, Panama, Jamaica, the Philippines, Gibraltar, Senegal, and Uganda from the high-risk register. Meanwhile, several countries — including Kenya, Laos, Lebanon, and Venezuela — were newly added to the list based on updated assessments.

For UAE-based businesses, the removal from the EU’s high-risk list is expected to improve access to European markets and financial services.

At the same time, the move reinforces expectations that compliance standards will continue rising. As the UAE strengthens its position as a global financial centre, companies across all sectors are under greater pressure to align with the evolving regulatory environment.

The message from regulators remains clear: the UAE is open to international business — but with a sharp focus on transparency, accountability, and financial integrity.