Approval from parliament needed
Trade talks continue regardless
UAE has made ‘huge progress’
The European Union (EU) plans to remove the UAE from its list of high-risk countries for money laundering, a move that could ease compliance burdens for investors and banks operating in the Gulf state.
The decision still requires final approval from the European Parliament and Council, which have up to two months to raise objections.
The European Commission said it had updated the list to reflect changes by the Financial Action Task Force (FATF), which removed the UAE from its “grey list” in February 2023 after the country made progress in strengthening its anti-money laundering (AML) and counter-terrorism financing framework.
“As a founding member of FATF, the Commission is closely involved in monitoring the progress of the listed jurisdictions, helping them to fully implement their respective action plans agreed with FAFT,” the European Commission said in a statement on Tuesday evening.
“Alignment with FATF is important for upholding the EU’s commitment to promoting and implementing global standards”
Brussels’ revised position comes as it resumes free trade talks with the UAE.
The EU had kept the UAE on its own blacklist despite the FATF decision, with lawmakers blocking a proposal to delist the country last year over continued concerns.
EU trade commissioner Maros Sefcovic told AGBI last month that trade talks would proceed regardless of the UAE’s listing status.
“We do not see this process as interrelated or linked,” he said at a press conference in Dubai.
“I have to compliment the UAE for achieving huge progress in that regard.”
The UAE, which was added to the FATF grey list in 2022, has introduced a series of reforms including stricter laws, increased penalties and more prosecutions.
Last year it launched a national strategy to combat money laundering and terrorism financing.
The UAE Central Bank this week fined six exchange houses a total of AED12.3 million ($3.3 million) for AML violations.
The regulator has also previously issued heavier penalties, including a AED200 million fine for one exchange house and a AED18 million dirham penalty for two foreign bank branches.
The EU is the UAE’s second-largest trading partner after China, accounting for about 8 percent of the country’s non-oil trade, worth nearly $68 billion last year, according to the UAE state news agency Wam.
Alongside the UAE the Commission also plans to delist Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal and Uganda.
Ten countries were added to the high-risk list: Algeria, Angola, Côte d’Ivoire, Kenya, Laos, Lebanon, Monaco, Namibia, Nepal and Venezuela.
