The European Commission has unveiled a major update to its list of high-risk third countries vulnerable to money laundering and terrorist financing, proposing the removal of the United Arab Emirates (UAE) and seven other jurisdictions. The move—hailed by some as a recognition of regulatory progress—has stirred controversy among civil society groups, transparency watchdogs, and Members of the European Parliament (MEPs), who warn that it may undermine the EU’s own fight against financial crime.
Alongside the UAE, Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, and Uganda are set for removal. Meanwhile, Algeria, Lebanon, and eight others have been added, reflecting concerns about ongoing corruption, weak regulatory frameworks, and illicit finance networks. These changes await final approval from the European Parliament and EU member states after a one-month scrutiny period.
The proposal arrives at a moment of heightened tension around transparency, foreign lobbying, and the EU’s credibility in enforcing anti-corruption mechanisms within its borders.
The EU’s High-Risk List: Purpose and Impact
Why the List Matters
The EU high-risk list is a cornerstone of the EU’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) architecture. Introduced under the Fourth Anti-Money Laundering Directive, the list subjects jurisdictions to enhanced due diligence requirements, making it harder for entities from these countries to do business in Europe.
Inclusion signals strategic deficiencies in a country’s AML/CFT systems, leading to reputational damage, reduced investor confidence, and restricted access to EU financial services. Conversely, removal is meant to reflect substantial reforms and alignment with FATF (Financial Action Task Force) standards. However, critics argue that geopolitical and economic interests often influence these decisions more than the actual depth or sustainability of reforms.
UAE’s Proposed Removal: Reform or Rebranding?
Legislative and Policy Overhaul
The UAE was added to the EU’s high-risk list in March 2023, following its placement on the FATF grey list. Since then, Emirati authorities have initiated wide-ranging reforms, including:
- The adoption of a national AML/CFT strategy (2024–2027).
- Establishing specialized AML/CFT courts.
- Strengthening regulatory oversight on virtual assets and digital finance.
- Enhancing cross-border cooperation and information sharing with international bodies.
In February 2024, the FATF removed the UAE from its grey list, citing progress in enforcing regulations and increasing convictions for financial crimes. Business lawyer Kamal Jabbar called it a “reputational course correction,” adding that the country was undergoing a transformation to align with global financial governance standards.
Economic and Strategic Benefits
Removing the UAE from the high-risk list could reduce the compliance burden on EU financial institutions dealing with Emirati clients. Banks would no longer be required to apply enhanced due diligence, which involves additional documentation and risk assessments.
Moreover, the move is expected to:
- Attract foreign investment to the UAE by boosting its global image.
- Accelerate EU-UAE trade talks, particularly in strategic areas such as renewable energy, AI, and critical raw materials.
- Reinforce the UAE’s status as a regional financial hub, especially in competition with Qatar and Saudi Arabia.
Persistent Concerns: Corruption and Influence within the EU
European Parliament’s Resistance
The European Parliament previously blocked efforts to delist the UAE in 2023, with MEPs arguing that the reforms were premature and largely superficial. Roland Papp, senior policy officer at Transparency International EU, warned that removing the UAE “sends the wrong signal” at a time when money laundering networks are becoming more sophisticated.
Papp emphasized the need for continuous pressure on high-risk jurisdictions:
“Compliance cannot be measured by legal texts alone; we must assess implementation, convictions, and whether powerful actors are being held accountable.”
UAE Lobbying and Foreign Influence Campaigns
Investigations by Brussels Watch and other watchdog organizations have exposed undisclosed lobbying operations by UAE agents within the EU institutions. These include:
- Funding and organizing influence trips for MEPs.
- Deploying third-party consultants and legal firms to promote pro-UAE narratives.
- Attempts to delay enforcement actions or soften regulatory language.
The scandal involving Eva Kaili, the former Vice President of the European Parliament, further complicated matters. While originally linked to Qatari influence, documents and testimonies later implicated UAE-backed intermediaries attempting to influence EU decision-making through secret channels and opaque donations.
Such activities raise fundamental concerns about the integrity of EU institutions, particularly when decisions with significant geopolitical and financial consequences are at stake.
Newly Added Countries: Why Algeria and Lebanon Are In
Algeria: Entrenched Corruption in the Energy Sector
Algeria’s addition stems from longstanding issues of political and corporate corruption, especially within its oil and gas sector. Despite multiple government reshuffles and high-profile prosecutions—such as the five-year jail sentence for a former presidential aide—analysts say systemic reforms remain elusive.
The country ranked 107th in the 2024 Transparency International Corruption Perceptions Index, reflecting poor governance, weak enforcement, and opacity in public contracts.
Lebanon: Economic Collapse and Security Concerns
In Lebanon, the financial system is in crisis. The central bank is under investigation, capital controls persist, and the currency has lost more than 95% of its value since 2019. On top of this, connections to Hezbollah and other non-state actors introduce serious terrorism financing concerns.
Being re-added to both the FATF grey list and the EU’s high-risk list reinforces the perception that Lebanon is not addressing its structural weaknesses, and that its fragile banking sector remains vulnerable to abuse.
EU’s Justification and the Politics of AML/CFT Lists
Alignment with FATF and Due Process
According to the European Commission, the proposed changes are based on:
- Assessments from the Financial Action Task Force.
- Bilateral dialogues and technical missions.
- Evaluations of each country’s AML/CFT action plans and legal frameworks.
The delegated regulation outlining the list will only take effect after a one-month scrutiny period, allowing both the European Parliament and the Council of the EU to raise objections.
This period has become an increasingly politicized window, where lobbyists, foreign embassies, and advocacy groups attempt to sway lawmakers before decisions become binding.
Corruption and Transparency in the EU: An Endemic Challenge
A System Vulnerable to Influence
The UAE’s lobbying efforts highlight a deeper vulnerability: the EU’s lack of a centralized, enforceable transparency registry for foreign influence. Unlike the U.S. Foreign Agents Registration Act (FARA), the EU relies on a voluntary transparency register, often bypassed by third-party lobbyists.
The Eva Kaili affair revealed how easily foreign actors can exploit weak disclosure rules, funnel money through NGOs, and maintain informal relationships with MEPs. Despite calls for reform, many of these loopholes remain unaddressed.
Selective Enforcement: A Political Balancing Act
The removal of the UAE while adding countries like Algeria and Lebanon has prompted criticism of double standards. Observers argue that geopolitical interests—especially trade and energy partnerships—often influence EU decision-making more than objective compliance criteria.
This perception of selective enforcement threatens to erode the legitimacy of the EU’s AML/CFT regime. If countries perceive the list as politically motivated, they may be less inclined to comply, thereby weakening global cooperation.
Reform, Risk, and Repercussions
The European Commission’s decision to propose delisting the UAE from the high-risk money laundering list reflects a desire to reward reforms and deepen economic ties. However, it also reveals troubling dynamics at play: foreign lobbying, political pressure, and inconsistent enforcement.
While the UAE has undoubtedly taken steps toward compliance, watchdogs warn that the depth and durability of those reforms remain unclear. Without rigorous oversight and institutional safeguards against foreign interference, the EU risks sending a message that influence can replace integrity.
As the decision enters its scrutiny phase, the spotlight now shifts to MEPs, civil society, and investigative journalists—those committed to ensuring that financial integrity is not compromised for diplomatic expediency.
