UAE REMOVED FROM THE EU HIGH-RISK (GREY) LIST

• By Edwin
• August 20, 2025
• No Comments

A New Era for Cross-Border Business

 

The removal of the United Arab Emirates (UAE) from the European Union’s high-risk third countries list marks a significant turning point for businesses engaged in cross-border trade, investment, and financial services between the Gulf region and Europe. This change follows the UAE’s earlier removal from the Financial Action Task Force (FATF) “grey list” in February 2024, after the country made substantial improvements to its anti-money laundering (AML) and counter-terrorist financing (CFT) frameworks.

 

For businesses, this is not just a regulatory update—it’s a practical shift that can reduce compliance burdens, speed up transactions, and open new strategic opportunities. At EM Global, we see this as a green light for companies to strengthen their UAE–EU connections, provided they maintain robust compliance standards.

 

Why This Change Matters for Businesses

 

1. Reduced Banking Friction

 

During the grey-list period, many European banks and payment providers automatically classified UAE-related transactions as high risk. This meant longer onboarding times, frequent document requests, and increased enhanced due diligence (EDD) requirements.

 

Now, with the EU reclassifying the UAE to a lower risk category, banks have greater flexibility to treat UAE clients and transactions as “standard” risk—significantly reducing red tape. This means:

• -Faster account openings for UAE companies in Europe.
• -Smoother correspondent banking relationships for Gulf-based banks and financial institutions.
• -Lower operational costs for compliance teams managing UAE transactions.

 

2. Faster & More Affordable Payments

 

Cross-border payments between the EU and UAE often suffered from delays, additional compliance checks, and higher transaction costs due to the previous high-risk classification.

With the removal from the EU list:

• -Payment processing times can improve, leading to quicker settlements for businesses.
• -Fewer payment holds or freezes triggered by automated risk filters.
• -More competitive FX rates and transaction fees, as banks remove the “risk premium” that was applied to UAE flows.

 

3. Boost to Trade Finance & Supply Chain Activities

 

Trade finance instruments such as letters of credit (LCs), bank guarantees, and supply-chain financing often require a positive risk assessment of the involved countries.

 

For importers, exporters, and commodity traders operating between the EU and UAE:

• -Banks may increase credit limits and improve terms for UAE-related transactions.
• -LC confirmation and discounting processes could become faster and less costly.
• -Smoother financing for industries like energy, metals, logistics, and consumer goods where UAE is a key hub.

 

4. Greater Ease in Capital Markets & Investment Transactions

 

Private equity firms, asset managers, and corporate investors working between the EU and UAE can now expect:

• -Fewer hurdles during investor onboarding in the EU.
• -Reduced documentation for UAE-based limited partners (LPs) investing in European funds.
• -Faster M&A deal closing timelines where UAE entities are involved.
• -For UAE-based investment funds, the change strengthens the case for positioning the UAE as a regional investment gateway for Europe, Africa, and Asia.

 

5. Simplified Operations for Professional Services

 

Law firms, audit firms, corporate service providers, and real estate brokers who previously had to apply automatic high-risk procedures for UAE clients can now adopt a more tailored, sector-based risk approach.

 

This can lead to:

• -Shorter client acceptance timelines.
• -Lower costs for due diligence work.
• -More competitive positioning when serving UAE clients in Europe.

 

What Doesn’t Change?  Maintaining a Risk-Aware Approach

While the reclassification is good news, it’s not a blanket approval for all UAE-related activities. Businesses should keep in mind:

• -Sector-specific risks remain. Industries like gold trading, real estate, and high-value goods are still considered sensitive and will attract targeted EDD.
• -Banks and payment providers will continue applying a risk-based approach to clients, meaning due diligence will still be required based on the nature of the business.
• -Sanctions compliance is unaffected. Entities must continue to screen transactions and counterparties against global sanctions lists.

 

Steps Businesses Should Take Now

 

To fully benefit from the UAE’s removal from the EU grey list, businesses should act quickly to realign their compliance, banking, and operational strategies:

 

1. Update Risk Frameworks

Revisit your AML/CFT policies and adjust the UAE’s risk rating.

Remove outdated references to “EU high-risk” classification in your manuals and onboarding procedures.

 

2. Engage with Banking Partners

Reopen discussions with EU banks that previously restricted UAE business.

Present your updated compliance position and controls to improve access to services.

 

3. Review Payment Channels

Optimise your payment routing to take advantage of reduced screening delays.

Negotiate better FX rates and transaction fees now that risk premiums are lowered.

 

4. Strengthen Trade Finance Capacity

Explore higher LC limits and improved terms with your financial partners.

Expand supplier and buyer relationships with reduced transaction barriers.

 

5. Communicate with Stakeholders

Inform clients, suppliers, and investors about the improved ease of doing business between the UAE and EU.

Use this as a relationship-building opportunity to grow trust and transaction volumes.

 

Opportunities for Cross-Border Expansion

 

The UAE’s updated status positions it as an even stronger global hub for trade, finance, and investment. With a business-friendly tax regime, strategic geographic location, and now reduced EU compliance barriers, companies can:

• -Base regional headquarters in the UAE while serving European markets.
• -Use UAE as a logistics and payment gateway for Asia–EU–Africa trade flows.
• -Tap into growing investment linkages between European capital and Gulf-based opportunities.

 

How EM Global Supports Businesses in This Transition

 

At EM Global, we specialise in helping businesses navigate regulatory changes and turn them into competitive advantages. Our services include:

• -Compliance Framework Refresh – Updating your AML, KYC, and risk management policies to align with the UAE’s new status.
• -Banking & Payment Facilitation – Connecting you with EU and UAE financial institutions that can support your cross-border needs.
• -Cross-Border Structuring – Designing efficient corporate, tax, and operational structures for UAE–EU trade and investment.
• -Trade Finance Advisory – Assisting with LC programs, supply chain financing, and treasury optimisation.
• -Ongoing Compliance Management – Providing managed KYC and transaction monitoring services for ongoing regulatory assurance.

 

 

The UAE’s removal from the EU high-risk list is more than just a compliance update—it’s a doorway to faster, smoother, and more cost-effective business between the Gulf and Europe.

 

Now is the time to review your cross-border strategy, strengthen banking and trade relationships, and position your business to take full advantage of this regulatory shift.

 

Contact EM Global today to explore tailored strategies for expanding your UAE–EU business operations while staying fully compliant.