UAE to see enhanced trade prospects, investor optimism after removal from EU's AML/CTF list

Al Etihad

10-07-2025

11 July 2025 00:50
MAYS IBRAHIM (ABU DHABI)The European Parliament's decision to remove the UAE from its money laundering watch list is a testament to the country's regulatory progress and is expected to unlock new opportunities for trade, investment, and strategic partnerships, according to analysts.Speaking with Aletihad, Ashish Mehta, founder and managing partner of legal services firm Ashish Mehta and Associates, explained the legal implications of this delisting.'The fact that the UAE has been able to get itself delisted … shows that governments [federal and local] and their respective agencies within the UAE have been very efficient and encouragingly proactive in meeting the EU's requirements,' he said.Mehta foresees a shift in the way international firms will approach corporate structuring or risk assessment when establishing a presence in the UAE.'Getting delisted from the EU's watch list means that the UAE has been able to put in place the necessary legal and regulatory framework, which now complies with EU's standards. The international firms already present in the UAE, or wishing to establish a presence, should therefore expect heightened accountability norms,' he said.
Turning Point in UAE-EU Relations Ehtesham Shahid, a UAE-based editor and researcher, described the delisting as 'a positive inflection point' in UAE–EU diplomatic relations.'For the EU, it signals recognition of the UAE's regulatory reforms and enforcement efforts in combating illicit financial flows. For the UAE, it's a diplomatic win that validates its compliance with international standards, particularly those aligned with the Financial Action Task Force (FATF),' he told Aletihad.From a broader perspective, Shahid pointed out that this decision reflects increasing trust and alignment between Brussels and Abu Dhabi, potentially paving the way for more strategic cooperation in climate and energy transition, trade facilitation, security, and counterterrorism. 'It also reinforces the UAE's status as a bridge between Europe and emerging markets in Asia and Africa, aligning well with the EU's evolving Global Gateway strategy,' he added.
Investor Confidence and FDI Set to Climb Experts maintain that the delisting will significantly bolster investor confidence, particularly among European institutional investors who are risk-sensitive to regulatory flags. 'When a jurisdiction is listed for money laundering concerns, it introduces reputational and operational risks. Removal from the watch list eliminates this friction and reduces compliance hurdles for cross-border financial transactions,' Shahid said.'As for FDI growth, the impact will likely be sector-specific, favouring industries where transparency and regulatory alignment are critical for capital flows,' he noted. Mehta added that this validation by the EU is bound to enhance the UAE's credibility ratings, which in turn would build investor confidence in several legitimate business sectors. 'A validation from the EU's authorities would naturally motivate global businesses to invest in the UAE with a renewed sense of interest and vigour, and with a greater sense of security and validation back home,' he said. Beyond investment, the move could revitalise bilateral trade flows between the UAE and the EU, according to Mehta. 'Even the UAE's businesses would greatly benefit as they are also likely to find greater recognition within the EU,' he said. Shahid also pointed out that the UAE's successful delisting positions it as a regional leader in financial governance.
'It positions the UAE ahead of peers who remain under scrutiny. This allows it to lead in setting regional norms on financial governance and anti-money laundering [AML] practices,' he said.