The UAE has recently undertaken landmark enforcement action, showing its growing alignment with global anti-corruption and AML norms. What does this mean for other jurisdictions looking to do business in or with the UAE?
The United Arab Emirates 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 After coming into effect on 14 October 2025, the New Aml and CFT Law repealed and replaced Federal Decree-Law No. (20) of 2018. This reflects the UAE’s ongoing commitment to aligning with international standards (including its commitment to sustaining its progress following removal from the FATF grey list on 23 February 2024)and its continuing efforts as it approaches the next FATF mutual evaluation in 2026.
Key Objectives of the New AML and CFT Framework
The New AML and CFT Law expands its regulatory coverage, enhances supervisory and enforcement powers, requires a more flexible evidentiary standard, and substantially strengthens obligations and liabilities for both individuals and legal entities. It also modernises key definitions to address risks associated with advances in technology and geopolitical developments.
For the first time, the law criminalises proliferation financing independently of terrorism financing and money laundering. This aligns with global regulatory requirements around non-proliferation risks, especially given the UAE’s strategic role in international trade, logistics, and transshipment activities. The definition includes any illicit dealing in materials, equipment, systems, or technology connected to weapons of mass destruction or their delivery systems, broadening potential liability across a wide range of industries.
The New AML and CFT Law also modernises the legislative framework to explicitly take into account virtual assets, digital value-transfer mechanisms, blockchain and distributed ledger systems, cryptographic technologies, and digital value-transfer mechanisms. This enables regulators to supervise Virtual Asset Service Providers (VASPs) more effectively, bringing them firmly within the AML/CFT regulatory oversight. This is particularly significant given the UAE’s rapid growth as a regional hub for digital asset exchanges, blockchain companies, tokenisation platforms, and fintech innovators.
The concept of “proceeds” has been expanded to include not only direct benefits, but indirect benefits, such as, privileges, economic interests and derived advantages. This widens the scope for confiscation and recovery, enhancing the UAE’s capacity to trace and seize assets linked to illicit activity and addressing potential 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 brings the UAE in line with other more mature jurisdictions and strengthens the capability to bring successful prosecutions, particularly in cases involving complex money-laundering cases where direct evidence may be limited.
Expanded Liability for Directors and Corporates
The New AML and CFT Law significantly strengthens penalties for both individual and corporate offenders. A manager or director may now be held personally criminally liable if an offence occurs due to their breach of duties or awareness of the misconduct. Crucially, no limitation period applies to offences under the law, ensuring that liability persists.
Predicate offences are expanded to expressly 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 toward transparency and international cooperation in fiscal and tax matters.
The legislation grants substantially stronger powers to supervisory authorities and the UAE’s Financial Intelligence Unit (FIU). 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 now execute foreign provisional or confiscation orders without requiring a domestic investigation — a major step forward in international asset recovery and cooperation.
The 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. It is tasked with overseeing the effectiveness of national AML/CFT strategy and measures, evaluating implementation, issuing binding recommendations, decisions and draft laws and coordinating with and overseeing the National Committee.
Impact on Businesses, DNFBPs and Financial Institutions
With regard to the impact on 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 and 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. From a corporate law perspective, this will require stronger governance and compliance frameworks.
Conclusion
The New AML and CFT Law constitutes a major evolution in the UAE’s financial crime regulatory framework. With stronger offences, broader liability, enhanced powers for authorities, and a modernised 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, signaling its determination to demonstrate sustained progress, operational effectiveness, world-class regulatory standards, and its credibility as a progressive, alternative financial centre.
If you or your business operates in a regulated sector in the UAE and need guidance on AML/CFT compliance, regulatory risk, or financial crime exposure, our team can assist with tailored legal advice and risk assessment. Contact James Berry Law for expert support on navigating UAE regulatory obligations and enforcement risk.
