On 9 July 2025, the European Union (EU) Parliament approved a proposal by the European Commission to remove both the United Arab Emirates (UAE) and Gibraltar from its "grey list" of high-risk countries under the Anti Money Laundering (AML) and Counter-Terrorist Financing (CTF) regime. This followed a move in February 2024 by the Financial Action Task Force (FATF), which sets international guidelines, to downgrade the countries.
The UAE was previously listed as a higher risk in 2022 by FATF and 2023 by the EU for weaker enforcement of AML laws, particularly around real estate, gold and freezones, a lack of prosecutions for financial crimes, as well as concerns around the abuse of Dubai's financial system for sanctions evasion and illicit finance.
Since then, FATF found that the UAE had largely tackled the issues in an action plan leading to increased suspicious transaction reporting and adopted a stricter enforcement and prosecutions regime.
Gibraltar was placed on the EU list in mid-2024, aligning with FATF's earlier assessment. The listing was triggered by the country's position as a financial centre within a British overseas territory, combined with EU concerns about AML controls. The removal also became a political issue, with Spanish members of the European Parliament (MEPs) and political groups opposing it, partly for leverage in UK/EU post-Brexit territorial disputes.
In February 2024, FATF removed Gibraltar, noting that the country had made progress to address AML issues. The EU followed suit in July 2025.
Being listed on these so-called grey lists has diplomatic, economic and reputational impacts for the affected countries and the delisting will no doubt be welcomed to boost investor confidence and ease compliance burdens.
Despite the changes to the official status, Dubai remains under informal scrutiny, particularly for its property sector, which has long been suspected of being a haven for illicit capital and the parking of questionable wealth from politically exposed persons (PEPs), criminals and sanctioned individuals. Dubai also offers company structures with limited beneficial ownership disclosure, making it attractive for hiding assets.
In a similar vein, although now officially off the list, there are still some concerns around Gibraltar's role in illicit finance, particularly due to its booming online gambling industry and relatively light-touch regulatory environment. While the country has made legislative improvements, questions remain around enforcement and supervision, particularly in areas vulnerable to abuse such as virtual assets and complex trust structures.
So what?
The EU’s decision reflects a broader pattern of countries becoming increasingly adept at implementing reforms just strong enough to secure delisting—without necessarily addressing systemic vulnerabilities in a meaningful or enduring way. In the case of the UAE and Gibraltar, while the formal grey-listing has been lifted, neither jurisdiction is entirely “risk-free,” and both remain subject to informal scrutiny by financial institutions, regulators, and investigative bodies worldwide. Delisting may ease diplomatic and commercial pressure, but it doesn’t guarantee genuine transformation.
For compliance professionals and investigators, the move should not signal a green light but rather a reminder to maintain a nuanced, risk-based approach, especially when dealing with sectors like real estate, gaming, offshore entities, or high-net-worth individuals with political exposure.