The United Arab Emirates has enacted a sweeping new anti-money laundering (AML) law, Federal Decree-Law No. 10 of 2025, in a move that overhauls its financial crime framework, strengthens enforcement powers, and aligns the country more closely with global standards under the Financial Action Task Force (FATF). The law replaces the 2018 AML regime, expands the scope of offences, raises penalties, and introduces new governance bodies and obligations intended to reinforce global financial integrity and accountability across the UAE’s banking, corporate, non-profit and virtual asset sectors.
Background and legislative context
Federal Decree-Law No. 10 of 2025 on Combating Money Laundering, the Financing of Terrorism, and the Financing of Arms Proliferation repeals and replaces Federal Decree-Law No. 20 of 2018, which previously formed the backbone of the UAE’s AML/CTF regime. The new statute came into force in mid-October 2025 and is explicitly designed to meet FATF’s core standards and outcomes, building on reforms undertaken since the UAE’s earlier mutual evaluation process. Authorities describe the legislation as a decisive strengthening rather than an incremental update, reflecting the UAE’s ambition to consolidate its position as a trusted global financial and trade hub.
Expanded scope of offences and definitions
The 2025 AML Law significantly broadens the legal definitions of “crime,” “predicate crime,” and “money laundering,” explicitly incorporating proliferation financing, tax evasion and digital-asset-related conduct as core elements of the regime. Predicate offences now expressly include the financing of arms proliferation and direct and indirect tax evasion, while money laundering is expanded to cover conduct carried out through digital systems, virtual assets and encryption technologies. The law also introduces or refines definitions of “criminal property,” “terrorist act,” “terrorist organisation,” “weapons of mass destruction,” “virtual assets” and “virtual asset service providers,” clarifying the perimeter of regulated activity and criminal exposure.
Lower evidentiary thresholds and liability standards
One of the most notable legal shifts is a lowered evidentiary threshold for money laundering offences, which is intended to ease prosecution and deter willful blindness. Under Article 2, liability can arise where a person knows, or has sufficient or circumstantial evidence supporting knowledge, that all or part of the funds derive from a predicate crime and nonetheless engages in specified acts, moving the regime closer to standards in jurisdictions such as the United Kingdom. The reform also emphasizes that offences can be committed through negligence or recklessness where a person “should have known” that an offence would be committed, widening the scope for enforcement action against both individuals and corporate actors.
Governance reforms and new oversight structures
To coordinate strategy and enhance accountability, the law creates a new Supreme Committee to oversee the National Committee for Combating Money Laundering and the Financing of Terrorism and Proliferation. This Supreme Committee is tasked with supervising the UAE’s national AML/CFT/CPF strategy, assessing effectiveness, proposing legislative changes, and representing the country in international forums. The National Committee retains responsibility for preparing and implementing national risk assessments, facilitating domestic and cross-border information exchange, and coordinating the work of supervisory and law-enforcement authorities across financial and non-financial sectors.
Stronger powers for the Financial Intelligence Unit
The UAE Financial Intelligence Unit (FIU) receives significantly enhanced investigative and preventive powers under the 2025 AML Law. The FIU may now freeze funds suspected of being linked to money laundering, terrorist financing or proliferation financing for up to 30 days, extended from a prior seven-day period, with the possibility of further extension by order of the Public Prosecutor. The FIU’s mandate also encompasses broader information-gathering, analysis and dissemination powers to domestic and foreign counterparts, bolstering the UAE’s ability to respond quickly to complex cross-border financial crime schemes.
Increased penalties and removal of limitation periods
Penalties under the new law are materially higher, reflecting a policy choice to increase deterrence and emphasise personal accountability at senior levels. For principal money laundering and related offences, fines can now reach up to AED 100 million, or in some cases the value of the criminal property, with the law also allowing a wide range of custodial sentences and ancillary sanctions. For breaches by legal persons, regulators may impose multi-million-dirham administrative fines, suspend or cancel licences, restrict activities, or order dissolution or closure of premises, and these sanctions are not limited to terrorism-related cases. In a further tightening, the law removes limitation periods for financial crime offences, creating effectively unlimited temporal exposure for serious AML/CTF/CPF violations.
Corporate accountability and management liability
The 2025 AML Law places explicit responsibility on boards and senior management to ensure effective compliance frameworks, risk assessments and controls, signalling a “top-down” model of accountability. Corporate officers may face personal liability, including fines, bans from management functions and other sanctions, where their failure to supervise or implement adequate controls contributes to violations. Regulators are empowered to restrict powers of board members or executive managers, suspend them, or appoint temporary controllers where responsibility for serious breaches is established.
Coverage of virtual assets, NPOs and cross-border flows
The law explicitly brings virtual asset activities and virtual asset service providers (VASPs) within the core of the AML/CTF/CPF framework, aligning the UAE with evolving FATF guidance on digital assets. Obligations now extend to financial institutions, designated non-financial businesses and professions (DNFBPs), non-profit organisations and VASPs, including risk-based customer due diligence, ongoing monitoring, and reporting of suspicious transactions. The statute also embeds requirements for controls around cross-border movements of funds and value, reflecting concerns over trade-based money laundering and complex international transfer structures.
Beneficial ownership transparency and false disclosures
In parallel with broader AML reforms, the law strengthens the UAE’s beneficial ownership transparency regime and introduces specific offences related to inaccurate reporting. Providing false or misleading beneficial ownership information is now a criminal offence, exposing individuals and entities to sanctions where they obstruct efforts to identify the natural persons who ultimately own or control legal structures. These provisions are intended to support both domestic investigations and international cooperation, particularly in cases involving complex corporate vehicles, trusts or multilayered holding structures.
Practical implications for financial institutions and businesses
Financial institutions, DNFBPs and VASPs operating in the UAE are expected to review and update their AML frameworks, policies and procedures to meet the new statutory requirements. Industry advisers highlight the need to re-assess risk appetites, enhance screening and transaction monitoring systems, revisit governance arrangements, and ensure that management information and escalation processes reflect the heightened liability environment. Firms are also urged to review their handling of virtual asset exposures, proliferation financing risks, tax-related offences and beneficial ownership data in light of the expanded offence definitions and enforcement powers.
International positioning and enforcement outlook
The enactment of Federal Decree-Law No. 10 of 2025 is framed by officials and practitioners as a key step in consolidating the UAE’s progress against FATF recommendations and reinforcing confidence among global counterparties, investors and correspondent banks. By embedding proliferation financing controls, tightening corporate accountability and enhancing the FIU’s mandate, the UAE aims to demonstrate sustained commitment to tackling complex financial crime and supporting global sanctions and non-proliferation regimes. Legal and compliance experts anticipate a more assertive enforcement environment, with regulators and prosecutors making use of the lowered thresholds, higher penalties and expanded powers to pursue cases across sectors in the months following implementation.