UAE Enacts Comprehensive AML Overhaul with Federal Law No. 10 of 2025 and Executive Regulation No. 134

As 2025 concluded, the United Arab Emirates (UAE) introduced significant reforms to its anti-money laundering (AML) regime through the enactment of Federal Law No. 10 of 2025 (the New AML Law) and Cabinet Executive Regulation No. 134 of 2025 (the Executive Regulation). These new legal instruments repealed Federal Law No. 20 of 2018 and Cabinet Decision No. 10 of 2019, marking a comprehensive overhaul aimed at aligning the UAE’s AML framework with international best practices, particularly those set by the Financial Action Task Force (FATF).

The New AML Law establishes the primary statutory framework for combating money laundering, terrorist financing, and proliferation financing, while the Executive Regulation operationalizes and clarifies procedural and enforcement aspects. The Executive Regulation details definitions, identifies persons subject to enforcement, and specifies sectoral applications, making it essential for compliance programs to incorporate both instruments rather than relying solely on the New AML Law.

A notable addition under the New AML Law is the distinct criminal offence of Proliferation Financing, targeting the financing of weapons of mass destruction. This offence complements existing money laundering and terrorist financing offences, collectively referred to as the UAE Principal Offences. The inclusion of proliferation financing is expected to impact sectors such as import/export, logistics, and technology by mandating stricter compliance measures for dual-use goods and imposing personal liability on directors, alongside increased penalties.

The legislation also lowers the criminal threshold for the UAE Principal Offences by allowing knowledge of illicit intent to be inferred from objective circumstances. This “should have known” standard facilitates prosecution of conduct previously considered ancillary, preparatory, or negligent, thereby enhancing enforcement effectiveness and aligning with FATF’s emphasis on preventive measures and senior management oversight.

Enforcement authorities are anticipated to focus on failures in implementing adequate AML systems and controls, insufficient oversight of delegated functions, and compliance deficiencies that materially elevate money laundering risks, even absent proven intent. This shift signals a more outcomes-focused supervisory and enforcement approach with reduced tolerance for technical noncompliance.

Senior management and board-level accountability have been significantly reinforced. The New AML Law and Executive Regulation clarify that compliance responsibility cannot be fully delegated to compliance officers or external advisers. Senior individuals, broadly defined to include Chief Executive Officers, General Managers, and Board Members, may face criminal or administrative liability for breaches arising from inadequate supervision, weak governance, or failure to act on identified risks. For instance, a bank branch manager could be held personally liable if the branch facilitates money laundering.

Boards and executive teams are urged to ensure that oversight arrangements are well-documented, risk-informed, and supported by regular management information and escalation mechanisms. Active involvement in reviewing and maintaining adequate AML systems and controls is critical to mitigating personal and corporate liability.

The scope of predicate offences—underlying criminal activities generating proceeds subject to money laundering—has been expanded to reflect FATF’s broad definition. This ensures that a wider range of economic and financial crimes, such as drug trafficking and tax evasion, are encompassed within the AML regime.

The UAE’s Financial Intelligence Unit (FIU) has been granted enhanced powers, including compelling information disclosure, suspending suspicious transactions for up to 10 working days, and freezing suspected illicit funds for up to 30 days. The Public Prosecution’s authority has also been broadened to direct investigations, access evidence, and trace, seize, and confiscate criminal assets. Additionally, the legislation formalizes and expedites cooperation with foreign authorities through information exchange and recognition of foreign criminal confiscation orders, likely increasing cross-border requests for information from financial institutions.

Virtual Asset Service Providers (VASPs) are explicitly incorporated into the enhanced AML compliance framework, consistent with FATF guidance. VASPs must implement risk-based customer due diligence, ongoing monitoring, and robust governance measures. Those operating under the Dubai Virtual Assets Regulatory Authority (VARA) must comply with both the Federal AML regime and VARA’s AML Rulebook, ensuring comprehensive regulatory adherence.

Overall, the UAE’s new AML regime represents a substantial strengthening of the country’s financial crime prevention framework. It imposes stricter compliance obligations, broadens the scope of offences, enhances senior management accountability, and integrates virtual asset oversight, positioning the UAE as a jurisdiction committed to rigorous AML enforcement and international cooperation.