The European Commission has taken a significant step to tighten anti-money laundering (AML) and counter-terrorist financing (CFT) enforcement across its borders. On June 10, 2025, the Commission officially adopted a revised list of high-risk third-country jurisdictions—countries whose strategic deficiencies in AML/CFT regimes threaten the EU’s financial ecosystem.
This update aligns the EU’s list with the evolving positions of the Financial Action Task Force (FATF) and other international bodies. It reflects the EU’s intensified focus on securing financial integrity and protecting its economy from exposure to illicit finance.
Monaco’s Inclusion and the Global Reaction
The most attention-grabbing addition is Monaco, a nation historically known for its affluence and banking secrecy. The European Commission’s decision to include Monaco is based on the FATF’s June 2024 report that flagged the principality’s inadequate transparency in beneficial ownership, vulnerabilities in private wealth management, and insufficient oversight in real estate transactions.
For decades, Monaco enjoyed a reputation as a discreet financial hub, but that same discretion has led to increased scrutiny. EU officials emphasized that despite its close proximity and diplomatic cooperation, Monaco must adhere to international AML/CFT standards like any other nation.
The move triggered concern among international investors and wealth managers operating in the microstate. However, EU authorities stated the classification is not punitive, but corrective—urging the principality to rapidly implement reforms to regain trust.
UAE’s Removal Marks Regulatory Progress
In contrast to Monaco’s grey-listing, the United Arab Emirates was formally removed from the high-risk list, a decision widely welcomed by the region’s business and finance sectors.
The removal followed the FATF’s own February 2024 delisting, which acknowledged the UAE’s sweeping reforms. These reforms included:
- Greater regulatory oversight of virtual assets
- Improved financial intelligence reporting
- Tighter controls on DNFBPs (Designated Non-Financial Businesses and Professions)
- Enhanced coordination between enforcement and supervisory bodies
This progress is not only symbolic but practical. Removal from the EU list simplifies cross-border banking, investment flows, and corporate due diligence for UAE-based firms doing business in Europe.
Complete List of Additions and Removals
Added to the High-Risk AML List:
- Monaco
- Algeria
- Angola
- Côte d’Ivoire
- Kenya
- Laos
- Lebanon
- Namibia
- Nepal
- Venezuela
Removed from the List:
- United Arab Emirates
- Barbados
- Gibraltar
- Jamaica
- Panama
- Philippines
- Senegal
- Uganda
These changes were made under Commission Delegated Regulation (EU) 2025/1473, amending the prior list established in Regulation (EU) 2016/1675.
Practical Impact on Financial Institutions
Being labeled as a high-risk country by the EU triggers immediate legal and compliance obligations. Institutions dealing with clients or transactions involving these jurisdictions must apply Enhanced Due Diligence (EDD) under the EU Anti-Money Laundering Directive (AMLD).
Key EDD measures include:
- Obtaining additional information about the customer and the beneficial owner
- Understanding the purpose and intended nature of the business relationship
- Enhanced ongoing monitoring
- Senior management approval for initiating or continuing the relationship
Failure to comply can expose banks and other entities to regulatory sanctions, reputational harm, and enforcement actions.
How These Changes Affect Compliance Officers and Legal Teams
Compliance professionals must now:
- Update AML/CFT country risk matrices
- Reassess third-party and customer due diligence for entities operating in the newly listed countries
- Revise onboarding workflows to reflect updated EDD requirements
- Communicate changes internally to business units and client-facing teams
Legal and compliance teams must ensure all regulatory documents, transaction monitoring rules, and training materials are updated in light of the revised list.
Similar Recent Developments Globally
- South Africa’s Continued Grey Listing
Despite some progress, South Africa remains under FATF’s increased monitoring for structural weaknesses in its AML/CFT regime, particularly in political corruption controls. - Nigeria’s Removal from FATF List (February 2024)
Nigeria was delisted after demonstrating substantial improvements in prosecution and asset recovery measures, prompting possible EU alignment in future reviews. - FATF Action on Turkey and Myanmar
Both countries are still on FATF’s grey list as of June 2025. Turkey faces scrutiny over terrorist financing, while Myanmar’s limited cooperation has drawn international concern.
These global examples highlight how national efforts to strengthen AML frameworks can shift their status on various international watchlists.
Alignment with the EU’s Broader AML Policy Goals
This updated list aligns with the EU’s 2020 AML Action Plan and the upcoming EU AML Authority (AMLA) framework expected to be fully operational by 2026.
The goals include:
- Creating a single EU rulebook for AML/CFT
- Enhancing supervisory convergence across member states
- Establishing a central EU-level supervisory authority (AMLA)
- Increasing cross-border data sharing on suspicious transactions
The recent updates show that the Commission is actively moving toward a harmonized and risk-based approach to AML across the Union.
Outlook for Countries on the List
Being on the EU high-risk AML list isn’t permanent. Countries are encouraged to cooperate with both the FATF and EU Commission to demonstrate tangible improvements.
Steps countries can take to be removed from the list:
- Enact legislation to strengthen beneficial ownership transparency
- Provide resources and independence to financial intelligence units
- Establish robust supervision of non-bank sectors (e.g., lawyers, accountants)
- Cooperate with FATF on mutual evaluations and follow-up reporting
For example, Barbados and Jamaica exited the list after implementing comprehensive national AML strategies and aligning supervisory controls with FATF recommendations.
Conclusion: Vigilance and Reform Go Hand in Hand
The EU’s revised high-risk AML list serves as both a warning and a roadmap. It informs financial institutions where risks lie, while also encouraging nations to reform outdated practices. The inclusion of Monaco shows that reputation alone no longer shields jurisdictions from scrutiny, while the UAE’s removal proves that reform is not only possible but rewarded.
For compliance officers, financial institutions, and cross-border investors, staying updated on such developments is essential—not just to meet legal obligations, but to remain agile and protected in a global economy shaped by transparency and accountability.
