.png)
.png)
Author: Fabin Ravindher
The United Arab Emirates has taken a decisive step toward strengthening its financial integrity with the enactment of Federal Decree by Law No. (10) of 2025 regarding anti-money laundering, combating the financing of terrorism, and proliferation financing (“New AML Law”). This legislation repeals the previous 2018 framework and introduces a comprehensive, modernised regime designed to respond to evolving global standards and emerging financial threats.
Why the reform was needed
Since 2018, the financial landscape has changed significantly. Virtual assets, cryptographic technologies and sophisticated cross-border structures have reshaped financial behaviour and created new vulnerabilities. The New AML Law addresses these developments by expanding regulatory coverage, strengthening enforcement capacity and embedding international compliance obligations directly into the UAE’s legislative structure.
Broader scope and clearer definitions
The New AML Law explicitly criminalises proliferation financing, placing it alongside money laundering and terrorism financing. It also introduces clearer and more detailed definitions for:- Virtual assets (VAs)
- Virtual asset service providers (VASPs)
- Beneficial ownership
These updates ensure that digital transactions and new forms of financial activity fall squarely within the UAE’s regulatory framework.
FIU transforming into an enforcement authority
The Financial Intelligence Unit (FIU) now holds expanded enforcement powers. It is authorised to:
- Freeze suspicious funds for up to 30 days without prior notice
- Suspend transactions linked to suspected financial crime
- Proactively exchange intelligence with domestic and international authorities
This change shifts the FIU from a primarily analytical role to one that can take swift, direct action to disrupt illicit financial activity.
Formalised targeted financial sanctions
Although the 2018 law required compliance with UN Security Council resolutions, the New AML Law institutionalises these obligations through the Executive Office for Control and Non-Proliferation. It clarifies procedures for:
- Freezing assets
- Prohibiting dealings with designated persons or entities
- Reporting breaches
This ensures stronger and more consistent sanctions compliance across all sectors.
Risk-based compliance and corporate transparency
Financial institutions, DNFBPs and VASPs must now:
- Adopt a risk-based AML/CFT approach
- Conduct robust customer due diligence
- Maintain accurate beneficial ownership information
- Secure senior management approval for AML/CFT policies
- Apply group-wide compliance across all branches and subsidiaries
These requirements strengthen corporate governance and align the UAE with FATF recommendations.
Stronger, scalable and proportionate penalties
The New AML Law introduces a modern penalty structure designed to deter wrongdoing across all levels of risk.
Money laundering
- Imprisonment from 1 to 10 years
- Fines between AED 100,000 and AED 5 million, or the full value of the criminal property
- Fines up to AED 10 million or double the criminal proceeds
- Life imprisonment or long-term custodial sentences
- Fines up to AED 10 million or double the asset value
- Fines up to AED 100 million
- Possible dissolution or closure of premises
This scalable system ensures meaningful penalties even in high-value or complex cases.
Regulation of virtual assets
The New AML Law introduces strict oversight for virtual asset activity, including:
- A prohibition on anonymous virtual assets
- Mandatory licensing for all VASPs
- Substantial fines and imprisonment for violations
This signals a strong regulatory stance toward unmonitored or opaque digital transactions.
International cooperation and asset recovery
The New AML Law enhances the UAE’s global cooperation through:
- Strengthened mutual legal assistance
- Expedited recognition of foreign freezing and confiscation orders
- Structured asset recovery procedures
- Mandatory national statistics to track enforcement effectiveness
These measures reinforce the UAE’s credibility as a global partner in combating financial crime.
Implications for businesses
All UAE-based organisations—banks, DNFBPs, VASPs and NPOs - must take proactive steps to ensure compliance with the 2025 regime. Immediate priorities include:
- Updating internal AML/CFT frameworks
- Enhancing transaction-monitoring systems
- Conducting specialist staff training
- Ensuring timely suspicious transaction reporting to the FIU
Non-compliance can lead to severe financial, operational and reputational consequences.
Conclusion
Federal Decree by Law No. (10) of 2025 is more than a legislative update; it is a strategic overhaul that significantly strengthens the UAE’s defence against financial crime. By expanding regulatory scope, enhancing enforcement powers and aligning with global standards, the UAE has introduced a modern, comprehensive and forward-looking AML framework that reinforces resilience, transparency and international credibility.
Note: This Legal Update / Newsletter is intended for general informational purposes only and should not be construed as legal advice. It is based on laws and legal interpretations in effect as of the date of publication. Laws and regulations may change over time, and their application can vary depending on individual circumstances. Readers are strongly encouraged to seek specific legal counsel before acting on any of the information provided herein.