European Commission removes Gibraltar and the UAE from ‘high-risk’ list
The European Parliament approved, on 9 July, a proposal by the European Commission to remove both Gibraltar and the United Arab Emirates (UAE) from its list of high‑risk jurisdictions regarded as having strategic deficiencies in their national anti‑money laundering and countering the financing of terrorism (AML/CFT) regimes.
EU entities covered by the AML framework are required to apply enhanced vigilance in transactions involving listed countries. In addition to the reputational damage, a listing adds costs to transactions involving people or entities from listed countries.
The EU listing process shadows the work of the Financial Action Task Force (FATF), the international anti-money laundering watchdog, in particular its ‘grey list’ of jurisdictions subject to increased monitoring. The Commission is mandated to update the high‑risk list regularly, but its proposals require the assent of both the European Parliament and individual member states.
This is not the Commission’s first attempt to delist Gibraltar and the UAE. It proposed doing so in March 2024 after both jurisdictions had been delisted by the FATF, but the proposal was vetoed by the European Parliament. This meant that the EU high-risk list was out of line with the FATF grey list for over 18 months, causing confusion and legal uncertainty for entities that must apply anti-money laundering rules.
“EU operators have to comply with divergent lists which increase their compliance burden, adds additional costs and impacts their global competitiveness,” EU Commissioner for Financial Services Maria Luis Albuquerque told the Parliament. “The fact that countries listed by the FATF are still not listed by the EU exposes the EU’s financial system to vulnerabilities and can create loopholes that need to be addressed.”
Gibraltar was first identified by the FATF as a jurisdiction under increased monitoring in June 2022 and placed on the ‘grey list’, despite rating as ‘Compliant’ or ‘Largely Compliant’ with 39 of the 40 FATF Recommendations and rating as ‘Partially Compliant’ with only one.
The Gibraltar government made a high-level political commitment to work with the FATF and Moneyval, the permanent monitoring body of the Council of Europe, to further strengthen the effectiveness of its AML/CFT regime by May 2023. Its agreed FATF Action Plan consisted of only two recommended actions, the fewest of any previously grey-listed country or jurisdiction.
In October 2023, the FATF made the initial determination that Gibraltar had substantially completed its action plan and warranted an on-site assessment. Following this assessment, in February 2024 the FATF stated that Gibraltar had resolved its strategic deficiencies within the agreed timeframe and was no longer subject to increased monitoring. It was removed from the FATF grey list.
Sovereign Trust (Gibraltar) Head of Business Development Ejaz Niazi said this could be a game-changer. The 2024 FATF delisting confirmed that Gibraltar was in compliance with global AML standards, but the continued EU high‑risk listing meant that European financial institutions were still required to apply enhanced due diligence (EDD).
“Formal removal from the EU list of high‑risk jurisdictions will reduce the compliance costs and barriers for clients wishing to use Gibraltar and reassure global investors, banks and counterparties about Gibraltar’s regulatory integrity,” said Niazi.
“This will make it easier for Gibraltar-regulated firms to engage with EU banks, law firms and fund managers and for Sovereign offices around the world to confidently refer clients to Gibraltar structures with fewer compliance frictions. It strengthens Gibraltar’s case as a viable jurisdiction for wealth structuring, fund domiciliation and corporate services.”
The UAE was added to the grey list in March 2022 after it had made a high-level political commitment to work with the FATF and the Middle East & North Africa Financial Action Task Force (MENAFATF) to strengthen the effectiveness of its AML/CFT regime to address the deficiencies identified by the FATF in its 2020 Mutual Evaluation.
At its October 2023 plenary, the FATF made the initial determination that the UAE had substantially completed its Action Plan and therefore warranted an on-site assessment. Following this assessment, it concluded that the UAE had met the commitments in its Action Plan. It was removed from the FATF grey list in in February 2024.
The UAE government has continued to sustain implementation of AML/CFT reforms. Last August, it amended its AML/CFT laws by adding measures to assist with investigations, to impose sanctions in cases of non-compliance by financial institutions and to increase the number of prosecutions to combat money laundering.
Last September, it also set out a 2024-27 National Strategy for Anti-Money Laundering, Countering the Financing of Terrorism and Proliferation Financing, which has 11 goals focused on risk-based compliance, effectiveness and sustainability.
“The EU delisting is very good news for the UAE, which should be congratulated for taking strong and credible steps to ensure its removal,” said Simon Gordon, Managing Director of Sovereign Corporate Services Dubai.
“The UAE has continued to implement significant legislative and structural reforms in areas including financial crime compliance, whistleblowing and virtual assets regulation. It is reassuring that the government is continuing to prioritise AML/CTF governance in 2025, particularly in view of the next FATF assessment in 2026.”
The European Commission also removed Barbados, Jamaica, Panama, the Philippines, Senegal and Uganda from its list of high‑risk jurisdictions, while a further 10 third‑country jurisdictions were added to the list – Algeria, Angola, Côte d’Ivoire, Kenya, Laos, Lebanon, Monaco, Namibia, Nepal and Venezuela.
