Shifting Burdens And Accountability: The New UAE AML Law

As part of its broader, ongoing drive to strengthen enforcement against financial crime, the United Arab Emirates has introduced a far reaching new law aimed at reinforcing its framework for combating money laundering, terrorist financing, and the financing of weapons proliferation. Federal Decree-Law No. 10 of 2025 on Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing (the "New AML Law"), issued in October 2025 and effective 14 October 2025, repeals and replaces the Federal Law No. (20) of 2018 on Anti-money Laundering and Combating the Financing of Terrorism and Illegal Organisations, ushering in a stricter and more comprehensive regime.

The New AML Law establishes a more sophisticated and coordinated enforcement structure, one that aligns the UAE with evolving international standards and responds to new financial crime typologies, including those involving virtual assets and digital systems.

Expanded Legal Scope and Definitions

The New AML Law significantly broadens the scope of regulated activity and introduces several key definitional changes that extend criminal and compliance obligations alike, in particular:

• Inclusion of Proliferation Financing: For the first time, the title of the legislation explicitly includes Countering Proliferation Financing, replacing the earlier reference to illegal organisations. This change reflects a deliberate policy shift: the law now introduces standalone offences for financing the proliferation of arms and weapons of mass destruction, supported by new statutory definitions.
• Expanded Predicate Offences: The concept of a Predicate Offence has been clarified to expressly include tax evasion (both direct and indirect), widening the base of underlying crimes from which illicit proceeds may originate.
• Digital and Virtual Assets: Recognising the rapid growth of digital finance, the law now provides that money laundering and terrorist financing offences can be committed through digital systems, virtual assets, or encryption technologies language that did not appear in the 2018 law.
• Refined Definition of Proceeds: The definition of Proceeds has been expanded to capture recurring or derivative benefits not only profits but also any other advantage derived from criminal property closing potential loopholes on indirect gains.
• Clarified Knowledge Standard: A person may now be held liable not only if they knew that funds originated from criminal conduct but also if they should reasonably have known, introducing a lower threshold of awareness similar to negligence-based standards seen in other jurisdictions.

This marks a significant shift from the prior regime and signals the UAE's intent to ensure accountability even where intent may be difficult to prove.

Increased Penalties and Enhanced Powers

The New AML Law also introduces heavier penalties and a stronger enforcement architecture, particularly through the UAE Financial Intelligence Unit (FIU) and a newly formalised asset recovery regime.

Strengthened FIU Authority

Article 5 empowers the Head of the FIU to suspend transactions for up to ten working days and freeze funds for up to thirty days, extendable by the Public Prosecutor. Under the 2018 law, these powers were limited to seven days and rested with the Central Bank Governor.

Freezing vs Seizure Clarified

The new definitions separate freezing from seizure measures.

1. A Seizure Order may extend for up to 10 days (extendable) and transfers control of the assets to the competent authority.
2. A Freezing Order may last 30 days (extendable) and restricts the holder's use, transfer, or disposal of assets while leaving them in their possession.

Formal Asset Recovery Framework

Article 22 introduces a comprehensive asset recovery mechanism, to be elaborated by forthcoming Cabinet regulations. It provides for confiscation and management of criminal property while safeguarding the rights of bona fide third parties, an element largely absent from the 2018 law.

Invalidation of Obstructive Arrangements

Any contract or transaction intended to hinder the seizure or confiscation of assets is now deemed null and void, reinforcing the UAE's determination to prevent evasion.

Substantially Increased Fines

Penalties have been raised across all key offences, many now linked directly to the value of the criminal property.

Failure to comply may result not only in financial sanctions but also in confiscation proceedings under the asset recovery framework.

An Expanded Remit for Supervision and Compliance

The New AML Law widens the obligations of financial institutions (FIs), designated non-financial businesses and professions (DNFBPs), and virtual asset service providers (VASPs), placing greater emphasis on continuous monitoring and pre-transaction due diligence.

1. Continuous Monitoring: Article 19 makes continuous monitoring a distinct obligation, requiring entities to maintain active, ongoing oversight of customer relationships and risk profiles.
2. Expanded Definition of "Client": A Client now includes any person or legal arrangement about to establish a business relationship, extending AML obligations to the pre-onboarding stage.
3. Forthcoming Executive Regulations: It is crucial to note that the Cabinet is expected to issue further guidance covering a wider spectrum of actors, non-profit organisations, commercial registries, company managers, nominee shareholders, and trustees indicating that more granular requirements are forthcoming. Until then, existing regulations remain in force.

Practical Implications

The introduction of Federal Decree Law No. 10 of 2025 marks a decisive step in the UAE's ongoing effort to build a robust, transparent, and internationally credible financial system. The enhanced enforcement powers, broadened definitions, and expanded FIU authority demonstrate that financial crime compliance will remain a top policy priority for all businesses and entities alike in the years ahead.

For companies and regulated entities operating in the UAE, this means revisiting internal controls, customer due diligence procedures, and ongoing monitoring frameworks to ensure alignment with the New AML Law. Businesses should also anticipate heightened supervisory activity and be prepared to respond swiftly to any FIU directives, information requests, or asset freezing orders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.