Off the Grey List: The UAE's Exit from FATF Increased Monitoring and What Followed

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1. Introduction

Listing by the FATF is a reputational and practical event. The FATF does not ask its members to apply enhanced due diligence to grey-listed jurisdictions. It does encourage them to take the listing into account in their risk analysis (FATF 2022). Other bodies attach legal consequences to it. Under EU law, banks and other obliged entities must apply enhanced checks to business involving countries on the Commission's high-risk third country list (EC n.d.).

The paper addresses three questions. What did the FATF ask of the UAE, and on what record? What legal and institutional changes did the UAE make before and after the decision? What did the EU do once the FATF had acted, and where does the UAE stand at the end of October 2026?

The paper uses primary sources only: FATF and MENAFATF reports and statements, UAE federal and Dubai legislation, statements by the UAE Ministry of Foreign Affairs and the Central Bank of the UAE (CBUAE), and EU texts from EUR-Lex, the Commission and the European Parliament. Every date is taken from the document cited. Where a document was read from an Internet Archive copy because the live site was unavailable, the Sources appendix says so.

2. The evaluation record

2.1 The 2020 mutual evaluation

The UAE was assessed jointly by the FATF and MENAFATF. The on-site visit ran from 1 to 18 July 2019, and the FATF adopted the report at its February 2020 plenary (FATF 2020, PDF pp. 2, 5). MENAFATF approved it by written process in April 2020 (MENAFATF 2023, para. 1).

The assessors found that the UAE had "made significant improvements" in recent years, including its National Risk Assessment and stronger coordination across the emirates. They added that the effect of many of these changes on effectiveness "was not fully evident at the time of the on-site visit" (FATF 2020, PDF p. 5, key finding a). On designated non-financial businesses and professions (DNFBPs) outside the financial free zones, they found that supervisors had only recently been established and that "very limited activity has occurred (only for some sectors) in terms of supervision beyond initial registration" (PDF p. 7, key finding i).

Of the eleven effectiveness outcomes, the UAE was rated Substantial on one (terrorist financing investigation and prosecution), Moderate on six and Low on four: international cooperation, legal persons and arrangements, money laundering investigation and prosecution, and proliferation financing sanctions (FATF 2020, PDF p. 18). On technical compliance with the 40 Recommendations it received 11 Compliant, 23 Largely Compliant and six Partially Compliant ratings, with no Non-Compliant rating (PDF p. 18). Figure 1 and Figure 2 present these results.

Figure 1. UAE effectiveness ratings by Immediate Outcome, mutual evaluation report, February 2020

Source: FATF 2020, PDF p. 18.

Figure 2. UAE technical compliance ratings across the 40 Recommendations, 2020, 2021 and 2023

Sources: FATF 2020, PDF p. 18; MENAFATF 2023, paras. 4 and 37, Table 2.

2.2 Follow-up and re-ratings

The UAE was placed in MENAFATF's enhanced follow-up process. Its first enhanced follow-up report was submitted to the 32nd MENAFATF plenary in June 2021 and, according to the third report, adopted in November 2021. It upgraded Recommendations 6 and 7 (targeted financial sanctions) from Partially Compliant to Compliant and Recommendation 25 from Partially Compliant to Largely Compliant. Recommendation 15 (new technologies, which covers virtual assets) was downgraded from Largely Compliant to Partially Compliant. The second report, in May 2022, sought no re-rating (MENAFATF 2023, paras. 2, 4).

The third report, adopted by the 36th MENAFATF plenary in May 2023, upgraded Recommendations 19 and 29 to Compliant and Recommendation 1 to Largely Compliant (MENAFATF 2023, PDF p. 2 and paras. 36 to 38). That left 15 Compliant, 24 Largely Compliant and one Partially Compliant rating, the last being Recommendation 15 (para. 37, Table 2). The UAE remained in enhanced follow-up and was due to submit a fourth report to the 38th plenary in April or May 2024 (para. 38). As at 30 October 2026 the MENAFATF follow-up page lists no fourth or later UAE report (MENAFATF 2026). Figure 3 tracks the Recommendations whose ratings changed.

Figure 3. UAE Recommendations re-rated in MENAFATF follow-up, February 2020 to May 2023

Sources: FATF 2020, PDF p. 18; MENAFATF 2023, paras. 2, 4 and 37, Table 2.

3. Listing and removal

3.1 March 2022: the action plan

The FATF's March 2022 statement records that the UAE made a high-level political commitment in February 2022 to work with the FATF and MENAFATF. It credits progress since the 2020 evaluation, including a terrorist financing risk assessment, a coordination committee, a system for applying targeted financial sanctions without delay and better confiscation and international cooperation, and says the UAE had "addressed or largely addressed more than half of the key recommended actions" (FATF 2022, UAE section).

The action plan had seven items: more outbound mutual legal assistance requests; a shared understanding of risk across DNFBP sectors; more and better suspicious transaction reports from financial institutions and DNFBPs; a more granular understanding of the risk of abuse of legal persons and arrangements; more resources for the Financial Intelligence Unit (FIU) to pursue high-risk threats such as foreign predicate offences, trade-based money laundering and third-party laundering; a sustained increase in money laundering investigations and prosecutions; and action against sanctions evasion (FATF 2022, items 1 to 7).

3.2 February 2024: removal

On 23 February 2024 the FATF found that the UAE had strengthened its regime "to meet the commitments in its action plan". Its statement lists six areas of progress: more outbound mutual legal assistance requests; better understanding of risk by DNFBP supervisors, together with effective and proportionate sanctions on financial institutions and DNFBPs and more suspicious transaction reporting by those sectors; risk-based measures against abuse of legal persons; more FIU resources and greater use of financial intelligence; more money laundering investigations and prosecutions; and sanctions for non-compliance with targeted financial sanctions, with a better understanding of sanctions evasion in the private sector. It concluded that the UAE "is therefore no longer subject to the FATF's increased monitoring process" and should "continue to work with MENAFATF to sustain its improvements" (FATF 2024, UAE section).

The UAE Ministry of Foreign Affairs described the outcome as the completion of "all 15 recommendations of its action plan" (MOFA 2024). The FATF's published statements set out seven action-plan items in 2022 and six areas of progress in 2024, the 2024 statement combining the 2022 items on DNFBP risk understanding and on suspicious transaction reporting. Neither statement uses the figure of 15, and EPIC found no published text of the full action plan, so the figure is reported as MOFA's.

4. The reforms

4.1 The legal base

Federal Decree-Law No. 20 of 2018 and its executive regulation, Cabinet Decision No. 10 of 2019, came into force on 29 November 2018 and 8 January 2019 respectively. The assessors noted that the framework applied across all emirates and both commercial and financial free zones (FATF 2020, para. 65). Federal Decree-Law No. 26 of 2021, effective 27 September 2021, amended the 2018 law and brought virtual assets and virtual asset service providers into its definitions (CBUAE n.d.b).

On 30 September 2025 the President issued Federal Decree-Law No. 10 of 2025 on anti-money laundering and combating the financing of terrorism and proliferation financing. It repeals the 2018 law, keeps existing regulations in force where they do not conflict, and enters into force two weeks after publication (UAE 2025, arts. 41 and 42). The CBUAE Rulebook gives its effective date as 14 October 2025 (CBUAE n.d.c). Its executive regulation is Cabinet Resolution No. 134 of 2025 (CBUAE n.d.a). The new law places a Higher Committee for the Supervision of the National Strategy under the Presidential Court, with powers that include supervising the UAE's mutual evaluation process (UAE 2025, art. 12). It sets up a National Committee chaired by the Central Bank Governor, with a General Secretariat (arts. 13 to 15).

4.2 Coordination: the Executive Office

In February 2021 the Cabinet approved an Executive Office for Anti-Money Laundering and Countering the Financing of Terrorism. It was to oversee the National Strategy and National Action Plan and report to the Higher Committee (MOFA 2021). In September 2024 a Cabinet decision, made under Federal Decree-Law No. 7 of 2024 amending the 2018 law, provided that the National Committee would replace the Executive Office in all its rights and obligations, and the amendments created a General Secretariat for the committee (CBUAE 2024b). The UAE Embassy in Washington states that in September 2024 the Cabinet approved a National Strategy for 2024 to 2027 built around 11 strategic goals (UAE Embassy n.d.). The CBUAE states that the National Committee includes more than 32 entities and works through eight specialised sub-committees (CBUAE 2024a, p. 1).

4.3 Beneficial ownership

Cabinet Decision No. 109 of 2023, dated 6 November 2023, regulates beneficial ownership procedures and repeals Cabinet Decision No. 58 of 2020 (UAE Cabinet 2023, arts. 22 and 23). A beneficial owner includes a natural person who holds 25% or more of a legal person's capital or voting rights, directly or through a chain of ownership (art. 5, PDF p. 3). Legal persons must keep a register and record changes within 15 days (art. 8, PDF p. 4). The 2025 law requires the Cabinet to regulate beneficial ownership procedures (UAE 2025, PDF p. 24).

4.4 DNFBPs and virtual assets

At the time of the 2020 evaluation the Ministry of Economy had been designated as supervisor for auditors and accountants, trust and company service providers, dealers in precious metals and stones, and real estate agents on the mainland and in commercial free zones, and the Ministry of Justice for lawyers (FATF 2020, PDF p. 29). In Dubai, Law No. 4 of 2022, issued on 28 February 2022, established the Dubai Virtual Assets Regulatory Authority (VARA). Its remit covers all zones of the emirate except the Dubai International Financial Centre (Dubai 2022, arts. 3 and 4).

4.5 Published enforcement indicators

The CBUAE reported that in 2023 it carried out 181 field examinations of licensed financial institutions and imposed AML/CFT fines totalling AED 113.675 million on banks, exchange houses, insurers and hawaladars. It said the FIU processed over 8,300 requests from law enforcement and prosecutors in 2022 and 2023, sent 710 technical reports to the Public Prosecution and that the number of memoranda of understanding and agreements signed with counterpart FIUs abroad had reached 68 (CBUAE 2024a, p. 2). These are the authority's own figures, reported here as published. The CBUAE's 2024 Annual Report gives 258 AML/CFT examinations in 2024 and AML/CFT fines of AED 120.464 million (CBUAE 2025, PDF pp. 13 and 25); its scope differs from that of the 2023 figures above.

5. The European Union's response

The EU list sits in the Annex to Commission Delegated Regulation (EU) 2016/1675 (EU 2016). Commission Delegated Regulation (EU) 2023/410 of 19 December 2022 added the UAE, citing the FATF's March 2022 decision (EU 2023, recital 5). It was published on 24 February 2023 and entered into force on the twentieth day after publication, 16 March 2023 (EU 2023, art. 2).

Commission Delegated Regulation (EU) 2025/1184 of 10 June 2025 removed the UAE together with Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal and Uganda, and added ten jurisdictions. The Commission concluded that these jurisdictions "no longer have strategic deficiencies" in their regimes (EU 2025, recitals 17 to 19). On 9 July 2025 the European Parliament rejected all four motions for resolutions objecting to the act (EP 2025a); the largest vote for an objection, on motion B10-0318/2025, was 264 in favour, 369 against and 55 abstentions (EP 2025c). The regulation was published on 16 July 2025 and entered into force on the twentieth day after publication, 5 August 2025 (EU 2025, art. 2; EC n.d.). The European Parliament's procedure file records the plenary decision on 9 July 2025, an entry dated 18 July 2025 that the delegated act was not objected to by Parliament, and the completion of the procedure (EP 2025b).

The Commission's list page, last modified on 16 March 2026, gives the latest amendments as Delegated Regulations (EU) 2026/46 and 2026/83, adopted on 3 and 4 December 2025. It lists 26 jurisdictions, and the UAE is not among them (EC n.d.). Figure 4 sets out the FATF and EU dates.

Figure 4. UAE in the FATF and EU listing processes, February 2020 to February 2027

Sources: FATF 2020, 2022, 2024, 2026; EU 2023, 2025; EC n.d.; EP 2025a; UAE 2025; CBUAE n.d.c; MOFA 2026.

6. Remaining challenges

Four issues remain open. The first is the next evaluation. The FATF calendar lists the UAE for a fifth-round assessment by the FATF and MENAFATF under the 2022 methodology, with a possible on-site visit in June 2026 and plenary discussion in February 2027, dates the calendar describes as indicative (FATF 2026). On 3 June 2026 the UAE Higher Committee reviewed national preparations for the joint FATF-MENAFATF evaluation (MOFA 2026). As of 30 October 2026 no public FATF or MENAFATF record confirms whether the on-site visit took place.

The second is virtual assets. Recommendation 15 was the one Partially Compliant rating left after the 2023 re-rating (MENAFATF 2023, para. 37). No later published re-rating was found.

The third is the new law itself. Federal Decree-Law No. 10 of 2025 is about one year old. Regulations under the 2018 law remain in force only where they do not conflict, until replaced (UAE 2025, art. 41). EPIC found no published data yet on cases, sanctions or supervisory results under the new framework.

The fourth is the gap between the UAE's own account and published FATF text. The figure of 15 action-plan recommendations comes from MOFA, and the 2024 replacement of the Executive Office from a CBUAE statement on a Cabinet decision; the FATF statements neither confirm nor contradict either point.

7. Conclusion

The record runs in a clear sequence: an evaluation in 2020 that found strong technical foundations and weak results, an action plan in 2022, removal in February 2024 and EU removal in August 2025. The UAE has since rewritten its core law. The FATF fifth-round assessment, scheduled on the published calendar, will test whether the results the FATF accepted in 2024 have held.

References

See Sources.