Opinion: The UAE’s Investment in Financial Integrity – A Model for the Region or a Global Test Case?
In the high-stakes world of global finance, few countries have undergone as dramatic a transformation as the United Arab Emirates (UAE). Once under scrutiny by the Financial Action Task Force (FATF), the UAE has rebranded itself as a regional leader in financial integrity. But is this shift a genuine recalibration—or a strategic necessity?
From Grey List to Global Roundtable
In February 2024, the FATF removed the UAE from its “grey list,” citing “substantial progress” in addressing strategic deficiencies.1 But the UAE didn’t stop at compliance. In May 2025, Abu Dhabi hosted the first-ever global roundtable of all nine FATF-Style Regional Bodies (FSRBs), attended by the FATF Secretariat—a symbolic move that positioned the UAE as a convener of global financial governance.1
“This meeting represented not only a shift in geography, but a strategic shift in mindset,” said H.E. Khaled Balama, Governor of the Central Bank of the UAE. “It was a commitment to inclusive, representative leadership, where regional experiences help shape global solutions”.1
In a further sign of international confidence, the European Union also removed the UAE from its grey list in April 2025, coinciding with the launch of bilateral Free Trade Agreement (FTA) negotiations. This move reflects the EU’s recognition of the UAE’s progress in aligning with international AML/CFT standards and its growing role as a credible financial hub.2
Expert Views: Applause and Caution
International experts have offered a mix of praise and prudence. “The UAE’s reforms are impressive in scope and speed,” said Morgan Heavener, a partner at Accuracy. “But the influx of high-risk capital, particularly from Russia, continues to test the resilience of these frameworks”.1
Steve Molloy, a compliance consultant, added: “The UAE’s free zones have made strides in AML and export controls, but enforcement consistency remains a challenge. The real test is whether these reforms are embedded across all jurisdictions, not just headline institutions”.1
A senior FATF official, speaking anonymously, noted: “The UAE has demonstrated political will, but the FATF will be watching closely in the lead-up to the 2026 assessment. Sustained enforcement and private sector engagement are critical”.
Proliferation Financing: The Next Frontier
Proliferation financing (PF)—the funding of weapons of mass destruction—has become a central focus. The UAE’s Executive Office for Control and Non-Proliferation (EOCN) has been tasked with implementing export controls and curbing the misuse of dual-use technologies.1
According to the UAE’s 2025 National Risk Assessment (NRA), over 84 government and private sector entities participated in the latest evaluation, including financial institutions, DNFBPs, VASPs, and NPOs.1 The assessment used advanced data analytics to identify vulnerabilities in trade-based money laundering and PF, particularly in sectors like gold trading, real estate and virtual assets.
The NRA also revealed that over 60% of DNFBPs had not yet implemented PF-specific risk assessments, and only 35% of VASPs had adequate controls in place to detect PF-related red flags.1
Meanwhile, a 2025 FATF report found that globally, only 16% of countries assessed had demonstrated high or substantial effectiveness in implementing targeted financial sanctions under UNSCRs related to proliferation.3 The report warned that unless both public and private sectors urgently bolster compliance, illicit actors will continue to exploit systemic weaknesses.
A Regional Ripple Effect
The UAE’s transformation is already influencing its neighbors. Bahrain and Saudi Arabia have accelerated their own AML/CFT reforms, citing the UAE’s model. “The UAE has become a benchmark for the region,” said Dr. Rania Al-Mashat, a regional economist. “But the challenge is to ensure that this momentum is institutionalized, not just driven by external pressure.”
The FATF’s 2024 follow-up report noted that the UAE is now “compliant” or “largely compliant” with 39 of the 40 FATF Recommendations, a significant improvement from its 2020 evaluation.3 However, the country remains under enhanced follow-up, signaling that international scrutiny is far from over.
Conclusion: A Leadership Moment with Global Stakes
The UAE’s journey from grey list to global convener is more than a regulatory success story—it’s a case study in geopolitical agility. By turning scrutiny into strategy, the UAE has positioned itself not just as a compliant jurisdiction, but as a thought leader in the evolving architecture of global financial governance.
Whether this leadership endures will depend on the country’s ability to maintain momentum, deepen institutional capacity and foster a culture of compliance that transcends borders and sectors. For now, the world is watching—and perhaps, taking notes.
References:
1 UAE National Committee for AML/CFT/CPF, 2025 National Risk Assessment and FATF Roundtable Summary, www.namlcftc.gov.ae
2 European Commission Press Release, EU-UAE Trade and Cooperation Developments, April 2025, ec.europa.eu
3 FATF, 2025 Mutual Evaluation Follow-Up Report and Proliferation Financing Effectiveness Review, www.fatf-gafi.org
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