The UAE introduces landmark new AML and CFT law

The UAE has recently introduced Federal Decree-Law No. 10/2025 regarding Anti-Money Laundering, and Combating the Financing of Terrorism and Proliferation Financing (the "New AML and CFT Law"), repealing and replacing Federal Decree-Law No. 20/2018 on Combating Money Laundering Crimes, the Financing of Terrorism and the Financing of Unlawful Organisations. This new legislation came into effect on 14 October 2025 and represents a significant step forward in strengthening the UAE’s anti-money laundering (AML) and countering the financing of terrorism (CFT) framework. The new law introduces standalone offences for proliferation financing, expands the scope of predicate offences to include tax evasion and explicitly covers digital systems and virtual assets. It also lowers the evidentiary threshold for establishing AML offences, allowing liability to arise from circumstantial evidence or reasonable inference, and strengthens supervisory powers and enforcement mechanisms.

Eight key highlights and takeaways

1. Standalone "Proliferation Financing" offence

For the first time, the New AML and CFT Law introduces a standalone offence of proliferation financing (Article 3(3)). It previously only referenced money laundering and terrorism financing.  Proliferation of arms is defined as the illicit and unauthorised trade in materials, systems, equipment, components, programs, or technology contributing to the production or development of weapons of mass destruction or their delivery means (Article 1).

2. Expanded scope of "Predicate Offence"

Predicate offences now explicitly include terrorism financing, proliferation financing, and tax evasion (both direct and indirect), broadening the range of underlying crimes linked to money laundering (Article 1).

3. Coverage of digital systems and virtual assets

The law explicitly provides for the use of digital systems, virtual assets, or cryptographic technologies in money laundering (Article 1 and 2(1)) and financing of terrorism offences (Article 3(1)), reflecting the growing role of technology in financial crime.

4. Broader definition of "Proceeds"

The term now includes any "other benefits derived" from profits, privileges and economic interests, so as to capture indirect benefits and not just direct profits (Article 1).

5. Lower evidentiary threshold

Under the New AML and CFT Law, establishing an AML offence no longer requires proving knowledge of the specific type or nature of the predicate offence from which the proceeds originated. Instead, such knowledge may be inferred from factual and objective circumstances surrounding the transaction (Article 2(3)). This marks a significant shift from a subjective test (where actual knowledge was required) to an objective test, asking whether a reasonable person would have recognised the illegitimate nature of the funds. In practice, liability can now arise based on circumstantial evidence and reasonable inference, even without direct proof of intent.

6. Increased penalties and liability

The New AML and CFT Law significantly raises the stakes for non-compliance. Legal persons (including companies and other entities) whose representatives, directors, or agents commit offences such as money laundering, terrorism financing, or proliferation financing now face fines ranging from AED 5 million to AED 100 million, or an amount equivalent to the criminal property involved (Article 27(1)). This is a substantial increase from the previous range of AED 500,000 to AED 50 million.

In addition to corporate liability, the law introduces personal criminal liability for managers and directors. Any individual responsible for the actual management of a legal person may be punished by imprisonment, a fine, or both, if it is proven that they were aware of the offence and that its commission resulted from their breach of duty (Article 27(5)).

Those who intentionally provide incorrect or misleading information regarding beneficial ownership to any authority shall be liable for imprisonment and a fine of no less than AED 20,000 or both (Article 35(1)).

Regulators are also empowered to impose administrative penalties, including fines of up to AED 5 million, revocation of licenses, suspension or restriction of business activities, and even the removal of board members or executives involved in violations (Article 17).

Importantly, the law stipulates that no limitation period applies to offences under this legislation, ensuring that perpetrators remain liable indefinitely (Article 37).

7. Enhanced enforcement powers

The New AML and CFT Law significantly strengthens enforcement mechanisms, granting broader authority to regulatory and judicial bodies. All Suspicious Transaction Reports and related information must now be submitted exclusively to the Financial Intelligence Unit (FIU) by financial institutions, designated non-financial businesses and professions, and virtual asset service providers (Article 11). This centralisation is intended to enhance the efficiency and effectiveness of financial intelligence gathering and analysis.

The FIU is also vested with new powers previously reserved for the Central Bank Governor. It can now suspend transactions for up to 10 days and freeze assets for up to 30 days (Article 5). Additionally, the Public Prosecution may seek the FIU’s opinion during investigations, reinforcing its role as a critical advisory body in financial crime cases (Article 9).

International cooperation has also been enhanced as the UAE courts can execute foreign orders for provisional measures or confiscation of criminal property without the need for a domestic investigation, streamlining cross-border cooperation and asset recovery (Article 21). 

8. New Supreme Committee

The New AML and CFT Law introduces the new Supreme Committee for Supervising the National Strategy for Combating Money Laundering, the Financing of Terrorism and the Financing of Proliferation under the Presidency. The Committee is intended to work closely with the National Committee (whose responsibilities are set out in the New AML and CFT Law).  It has a number of powers, including to study, monitor and evaluate the effectiveness of the strategies and procedures adopted by the National Committee, and to issue recommendations and decisions in this regard (Article 12).

Comment

These reforms underscore the UAE’s commitment to combating financial crime and safeguarding its financial system. They follow the country’s removal from the FATF grey list in March 2024 and the EU high-risk countries list in July 2025, reinforcing its alignment with FATF standards and international best practices.

As the UAE prepares for the FATF’s next mutual evaluation in 2026, this legislation signals a proactive approach to strengthening resilience and integrity across its financial sector.