Other BriefingsUAE Enacts Comprehensive Anti-Money Laundering (AML) Law to Reinforce Global Financial Integrity and Enforcement Accountability
The UAE has implemented the new Anti-Money Laundering (AML) Law, strengthening enforcement against financial crime, expanding definitions, penalties, and FIU powers to align with FATF standards and bolstering global trust in the Emirates’ financial system.
The UAE has taken a decisive step to reinforce its financial safeguards and ensure long-term regulatory credibility. Federal Decree-Law No. 10 of 2025 on Anti-Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing (hereinafter, the “new AML law”), effective October 14, 2025, replaces the 2018 framework with a more comprehensive and enforcement-driven regime.
The new AML law arrives at a pivotal time, as the UAE builds on its removal from the Financial Action Task Force (FATF) grey list and the European Union’s high-risk country list earlier in the year.
The legislation anchors transparency and accountability at the core of the country’s strategy to maintain its position as a trusted global hub for trade, finance, and investment. Regulators aim to close gaps in the oversight of digital and virtual assets, enhance cross-border cooperation, and embed stronger mechanisms for asset recovery and supervision.
By tightening compliance expectations for financial institutions, designated non-financial businesses and professions (DNFBPs), and virtual asset service providers (VASPs), the UAE signals that it will not compromise on anti-financial crime enforcement. The new AML law carries forward a zero-tolerance approach, one that aligns national priorities with international standards and supports investor confidence in the country’s evolving financial ecosystem.
Expanded legal scope and definitions
The updated framework widens the scope of financial-crime enforcement and addresses long-standing blind spots. The most notable shift is the explicit inclusion of Countering Proliferation Financing (CPF). The law treats CPF as an independent offence for the first time and introduces clear definitions related to the financing of weapons of mass destruction. In practice, the revision aligns the UAE with global security standards and signals stronger vigilance toward high-risk cross-border activities.
The legislation also broadens the list of predicate offences to include both direct and indirect tax evasion. This expansion deepens the link between financial-crime controls and the UAE’s maturing tax framework, giving authorities a clearer basis to pursue illicit flows across corporate structuring, customs declarations, and cross-border transactions.
To address emerging digital-finance risks, the law recognizes money-laundering and terrorist-financing offences committed through digital systems, virtual assets, and encryption technologies. This revision reflects the rising share of digital transactions and the need for institutions to strengthen monitoring across virtual-asset channels and technology-enabled payment platforms.
The definition of proceeds now covers recurring or derivative benefits, not only direct profits. This expanded definition captures indirect benefits that earlier rules did not fully regulate and reinforces the UAE’s shift toward a more comprehensive asset-recovery regime.
Finally, the revised knowledge standard expands liability to situations in which a person “should reasonably have known” that funds originated from criminal activity. This lower threshold raises the bar for due diligence. Businesses must now demonstrate stronger controls and clearer decision-making processes, as regulators expect firms to identify and act on risk indicators earlier and more consistently.
Enhanced FIU powers and enforcement architecture
Financial Intelligence Unit (FIU) authority expands significantly under the new framework, creating a more coordinated and decisive enforcement structure. The Head of the FIU now holds the power to suspend transactions for up to ten working days and freeze funds for up to thirty days, with extensions available through the Public Prosecutor. These expanded powers enable the FIU to move quickly when it detects suspicious activity, giving regulators more time to assess risks and prevent the movement of illicit funds.
Another significant update clarifies the distinction between freezing and seizure measures. A freezing order restricts the use, transfer, or disposal of assets while allowing the holder to retain possession, whereas a seizure order transfers control of assets to authorities for a defined period. Clear timelines and definitions help institutions manage compliance obligations and reduce uncertainty when responding to FIU directives.
Separately, article 22 establishes a structured process for confiscating and managing criminal property, including safeguards for bona fide third parties, a feature largely absent from the previous law. Cabinet-level regulations will further define these processes, signaling a shift toward more robust and transparent asset-recovery practices across the financial system.
To prevent circumvention, the law renders void any contract or transaction designed to obstruct seizure or confiscation, eliminating avenues previously used to shield assets through artificial arrangements or backdated transfers
Penalties and accountability mechanisms
The penalty regime becomes more deterrent and proportional, with fines tied to the value of criminal property.
The law also introduces broader legal consequences for entities and individuals who ignore AML/CFT/CPF duties. Regulators can pursue imprisonment and confiscation for repeated or serious breaches, which now carries explicit compliance duties and encourages firms to close operational gaps before they escalate into legal risk.
A major shift lies in the removal of any limitation period for offences under the AML/CFT/CPF framework. Authorities can investigate and prosecute wrongdoing regardless of when it occurred. This long-term accountability requires businesses to maintain comprehensive records, ensure consistent monitoring, and establish audit trails that withstand scrutiny over extended periods.
The Public Prosecutor now plays a more central role in supervising the use of FIU powers. Extensions for transaction suspensions and asset freezes require prosecutorial approval, creating a more rigorous decision-making process and improving oversight across the enforcement chain. This strengthened coordination signals the UAE’s intent to build a more integrated, transparent, and effective enforcement ecosystem.
Expanded compliance obligations for FIs, DNFBPs, and VASPs
Compliance expectations rise across the financial system, with Article 19 making continuous monitoring a core obligation. This approach encourages institutions to adopt real-time oversight rather than periodic reviews that may miss emerging risks.
The definition of a client now extends to any individual or entity seeking to establish a business relationship. This expansion pushes firms to conduct pre-onboarding due diligence, tightening gatekeeping at the earliest stage of interaction and reducing front-end vulnerabilities. Institutions must identify beneficial owners, verify source of funds, and evaluate risk indicators before onboarding rather than after the relationship begins.
The law also broadens the scope of regulated sectors. Trustees, nominee shareholders, and commercial registries come under clearer compliance obligations, reflecting the UAE’s effort to close structural blind spots in corporate ownership, asset control, and entity formation. Bringing trustees, nominee shareholders, and registries into the compliance perimeter enhances transparency across entity formation and ownership structures.
Further Executive Regulations will introduce detailed rules for non-profit organizations, company managers, and beneficial ownership verification. These forthcoming requirements signal deeper alignment with global standards and a more consistent compliance environment across sectors. Businesses should prepare for more granular expectations and tighter scrutiny as regulators refine the implementation framework in the coming year.
Strategic implications for business and financial institutions
Businesses now face a more demanding compliance environment that requires tighter governance and stronger coordination across functions. Firms need to recalibrate internal controls, integrate tax-linked risk indicators into AML systems, and upgrade digital-asset monitoring capabilities to meet tighter expectations. Compliance teams need clearer escalation protocols, stronger documentation standards, and more active board-level oversight to manage these obligations effectively.
The inclusion of tax evasion as a predicate offence creates a direct link between financial-crime controls and corporate tax governance. Companies must link AML monitoring with tax-reporting systems, reconcile discrepancies across internal data streams, and strengthen controls around transfer pricing, customs declarations, and cross-border payments.
Digital-finance players face heightened expectations. Virtual asset service providers and fintech firms must prepare for more targeted supervision, including Travel-Rule compliance, enhanced customer verification, and stricter monitoring of digital transactions. These requirements will reshape onboarding flows, transaction-screening tools, and technology investment priorities.
Operational readiness becomes a critical differentiator. Firms need clear playbooks for handling FIU suspensions and freezing orders, including client communication protocols, liquidity considerations, and rapid-response mechanisms. Strong record-keeping and auditability will help institutions demonstrate compliance under a regime that allows long-term investigation and prosecution.
Outlook: Building a self-sustaining compliance ecosystem
The UAE’s regulatory direction points toward a more mature, risk-based enforcement model that encourages institutions to move beyond checklist compliance. Regulators expect firms to prioritize high-risk activities, strengthens monitoring of complex corporate structures, and invest in technology that supports real-time detection. This shift aligns the country with global best practices and reduces reliance on prescriptive rules that struggle to keep pace with evolving financial-crime typologies.
The next phase of implementation will hinge on the Cabinet regulations scheduled for release through 2026, which will clarify obligations for non-profit organizations, company managers, beneficial ownership verification, and digital-asset activities. These regulations will integrate the 2025 law with the FATF framework, creating a more consistent and predictable compliance environment for domestic and foreign firms.
The broader economic impact will reach beyond regulatory alignment. Stronger enforcement and clearer expectations will reinforce confidence among correspondent banks, reduce friction in cross-border transactions, and support foreign investors seeking stability and transparency. Strengthened oversight of virtual assets and emerging fintech hubs will also position the UAE as a credible center for regulated digital-finance activity.
By building a self-sustaining compliance ecosystem, the UAE aims to protect its financial infrastructure while sustaining its long-term ambition to serve as a global hub for trade, investment, and innovation.
About Us
Middle East Briefing is one of five regional publications under the Asia Briefing brand. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Dubai (UAE). Dezan Shira & Associates also maintains offices or has alliance partners assisting foreign investors in China, Hong Kong SAR, Indonesia, Singapore, Malaysia, Mongolia, Japan, South Korea, Nepal, The Philippines, Sri Lanka, Thailand, Italy, Germany, Bangladesh, Australia, United States, and United Kingdom and Ireland.
For a complimentary subscription to Middle East Briefing’s content products, please click here. For support with establishing a business in the Middle East or for assistance in analyzing and entering markets elsewhere in Asia, please contact us at dubai@dezshira.com or visit us at www.dezshira.com.
- Previous Article From Residency Visas to Returns: Why Luxury Apartments Are Fueling Dubai’s Boom
- Next Article
