UAE strengthens anti-money laundering and financial crime laws

This article was written by Nichola Reece-Burton, Partner and Head of Litigation, Dispute Resolution and Real Property and James Berry & Associates.

The United Arab Emirates has taken landmark enforcement action, showing its growing alignment with global anti-corruption and anti-money laundering (AML) standards. What does this mean for other jurisdictions doing business in or with the UAE?

The UAE has issued Federal Decree-Law No. (10) of 2025 on Anti-Money Laundering, Combating the Financing of Terrorism and Financing of Proliferation (New AML and CFT Law), significantly strengthening its financial crime framework.

After coming into effect on 14 October 2025, the law repealed and replaced Federal Decree-Law No. (20) of 2018. It reflects the UAE’s ongoing commitment to international standards, including sustaining progress following its removal from the FATF grey list on 23 February 2024 and preparing for its next FATF mutual evaluation in 2026.

The New AML and CFT Law expands regulatory coverage, enhances supervisory and enforcement powers, introduces a more flexible evidentiary standard and substantially strengthens obligations and liabilities for individuals and legal entities. It also modernises key definitions to address risks arising from technological and geopolitical developments.

For the first time, the law criminalises proliferation financing independently from terrorism financing and money laundering. This aligns the UAE with global regulatory requirements relating to non-proliferation risks, especially given the country’s strategic role in international trade, logistics and transshipment activities. The definition covers any illicit dealing in materials, equipment, systems or technology linked to weapons of mass destruction or their delivery systems, widening potential liability across numerous industries.

The New AML and CFT Law also updates the legislative framework to explicitly include virtual assets, digital value-transfer mechanisms, blockchain and distributed ledger systems and cryptographic technologies. This enables regulators to supervise Virtual Asset Service Providers (VASPs) more effectively, bringing them fully within the AML/CFT regulatory oversight. This is particularly important as the UAE continues its rapid growth as a regional hub for digital asset exchanges, blockchain companies, tokenisation platforms and fintech innovators.

The concept of ‘proceeds’ now includes both direct and indirect benefits, such as privileges, economic interests and derived advantages. This widens the scope for confiscation and recovery powers, strengthening the UAE’s ability to trace and seize assets linked to illicit activity and addressing loopholes involving layered or non-financial benefits.

One of the most consequential changes is the shift from a subjective knowledge test to an objective inference-based test. Knowledge of the illicit origin of funds can now be inferred from factual circumstances, objective indicators, reasonable inference and circumstantial evidence. This aligns the UAE with more mature jurisdictions and supports successful prosecutions, particularly in complex money laundering cases where direct evidence may be limited.

Penalties have been significantly strengthened for both individual and corporate offenders. Managers or directors may now be held personally liable if an offence occurs due to their breach of duties or awareness of misconduct. Crucially, there’s no limitation period for offences under the law, ensuring that liability persists.

Predicate offences are extended to include terrorism financing, proliferation financing and the evasion of direct and indirect taxes. The inclusion of tax evasion aligns the UAE with major financial centres and signals a clear shift towards transparency and international cooperation in fiscal and tax matters.

Supervisory authorities and the UAE’s Financial Intelligence Unit (FIU) now hold significantly enhanced powers. The Public Prosecution is also granted wide powers and may request the FIU’s analytical input during investigations, reinforcing an integrated and cooperative intelligence-led enforcement approach. UAE courts may also execute foreign provisional or confiscation orders without requiring a domestic investigation — a major step forward in international asset recovery and cooperation.

A new Supreme Committee for the Supervision of the National Strategy for Anti-Money Laundering and Combating the Financing of Terrorism and Proliferation Financing has been established under the Presidential Court. The committee oversees the effectiveness of the national AML/CFT strategy, reviews implementation, issues binding recommendations and draft laws, and coordinates with the National Committee.

For financial institutions, Designated Non-Financial Businesses and Professions (DNFBPs) and VASPs, the new regime requires:

• Enhanced customer due diligence
• Strengthened internal measures and controls
• Improved transaction-monitoring tools
• Tailored risk assessments for digital assets
• Tighter governance around beneficial ownership obligations.

Industries particularly affected include real estate, corporate service providers, gold and precious metals traders, auditors and crypto-asset platforms.

Conclusion

The New AML and CFT Law represents a major evolution in the UAE’s financial crime regulatory framework. With stronger offences, broader liability, enhanced powers for authorities and a modern approach to digital assets and global cooperation, the UAE is positioning itself as a robust, transparent and internationally aligned financial centre.

The reforms arrive at a strategic moment as the UAE prepares for its 2026 FATF mutual evaluation, signalling its commitment to sustained progress, operational effectiveness and world-class regulatory standards, as well as its credibility as a progressive, alternative financial centre.