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The European Commission has put forth a proposal to exclude the UAE from its list of countries identified as high-risk for money laundering and financing of terrorism. This suggestion includes the addition of Algeria and Lebanon, along with eight other locations, as detailed in a statement released by the commission.
The delegated regulation update is expected to be implemented within a month unless it faces opposition from EU member states or the European Parliament. As part of this update, the UAE will be removed from the list alongside Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, and Uganda.
Conversely, Algeria, Angola, Côte d’Ivoire, Kenya, Laos, Lebanon, Monaco, Namibia, Nepal, and Venezuela will be designated as high-risk jurisdictions that require enhanced oversight.
The EU’s high-risk list, created under the Fourth Anti-Money Laundering Directive, identifies third-party jurisdictions with notable deficiencies in their anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks. Being included on this list leads to heightened scrutiny from EU financial institutions and makes it more challenging to access funding.
Implications for the UAE and Other Nations
- The UAE, which was added to the EU’s high-risk list in March 2023, has made substantial reforms, including the implementation of a national anti-money laundering strategy. Its removal corresponds with its exit from the Financial Action Task Force (FATF) “grey list” in February 2024, reflecting enhancements in legislative, regulatory, and enforcement measures.
Read: UAE approves new AML, CFT national strategy for 2024-27
- Algeria faces ongoing issues regarding corruption and financial malpractice, which were underscored by a 2024 ranking from Transparency International placing it 107th globally and notable prosecutions, such as a five-year prison sentence in April for a former presidential aide.
- Lebanon has been included due to its ongoing economic and political instability, which is exacerbated by its ties to non-state armed groups.
The commission’s update is based on the FATF grey list, discussions with bilateral partners, on-site evaluations, and an extensive technical assessment. It has reaffirmed adherence to FATF standards and stressed the EU’s commitment to safeguarding its financial system through global cooperation against money laundering and financing terrorism.
For the proposed updates to take effect, they must undergo a one-month review period during which objections may be raised by the European Parliament or Council.