UAE’s Game-Changing AML Reform: Navigating Federal Decree Law No.10

The entry into force of Federal Decree Law No.10 of 2025 (the “New Legislation”) marks a landmark overhaul of the UAE’s Anti-Money Laundering and Terrorism Financing framework. The key changes include:

• significant expansion of regulatory functions expressly to include Proliferation Financing offences;
• strengthening the region’s existing legislative and regulatory landscape with tighter compliance requirements;
• greater regulatory oversight; and
• the imposition of harsher penalties for non-compliance.

In this article we consider the practical implications of the New Legislation for Financial Institutions and Directors & Officers.

The new and enhanced regime replaces Federal Law No.20 of 2018 (the “Old Legislation”) and solidifies the UAE’s status as a leading global commercial centre, bringing the region in line with global standards for combatting money laundering outlined by the Financial Action Task Force (“FATF”). This move highlights the UAE as a safe and attractive location for entities to do business, signalling its intent to be one of the world’s leading economic and financial hubs and follows the UAE’s removal from the FATF Grey List in February 2024.

Introduced on 14 October 2025, the New Legislation presents increased compliance obligations for financial institutions and directors, requiring them to navigate a more demanding, wider-reaching and robust legislative landscape, that builds upon prior legislation from 2018 and 2021.

Key changes: expanded scope of UAE’s anti-money laundering regime

New criminalised offence: Article 3 of the New Legislation introduces Proliferation Financing as a standalone offence, extending oversight into transactions which make it illegal to finance, without authorisation, arms or weapons of mass destruction. Proliferation Financing joins anti-money laundering and terrorist financing as the three principal offences under the New Legislation. Its inclusion creates a new risk profile that directors must be mindful of when conducting business in the region to minimise exposure to enforcement actions.

Expanded coverage: Digital assets have become increasingly important to the modern global economy, encompassing blockchain-based items such as Non-Fungible Tokens (“NFTs”), crypto assets and virtual currencies. Digital growth and innovation have been exponential with the UAE positioned at its heart. In light of this rapid growth, the New Legislation expands its scope by adding several new predicate offences, including Misuse of Virtual Assets, Trade-Based Money Laundering, Cyber-Enabled Financial Crimes and Environment and Tax Crimes. Industries with higher risk profiles, such as Designated Non-Financial Businesses and Professions (“DNFBPs”), real estate and virtual asset service providers, are required to use AI systems to monitor transactions and detect risks proactively. The expanded measures reflect the need to address challenges posed by the digital era and tackle modern financial risks, introducing extra layers of compliance requirements for financial institutions and directors & officers.

Greater scrutiny and harsher penalties: Under the Old Legislation, only the Governor of the UAE Central Bank and Public Prosecutor could issue seizure and freezing orders. The New Legislation grants these powers to the region’s Financial Intelligence Unit (“FIU”) which now has enhanced authority to coordinate with FIU’s from other jurisdictions for intelligence sharing. Penalties for principal offences have become more severe. Legal entities can be subject to fines of between AED 5 million and AED 100 million, and regulated entities can face fines of between AED 200,000 and AED 10 million for failing to have the correct authorisations. Crucially, the New Legislation has introduced personal criminal liability for managers of legal entities if they have actual knowledge of a principal offence.

What does this mean?

It is clear that the UAE’s regulatory landscape is rapidly evolving as it bids to become a major global hub. This shift brings greater risks for financial institutions and directors & officers, especially as the threshold for prosecuting money laundering offences has been aligned with jurisdictions such as the UK; lowered from actual knowledge of criminal intent to knowledge that is deemed from objective circumstances.

The New Legislation significantly broadens the scope of corporate liability by introducing an expanded range of offences and imposes greater responsibilities on corporate entities and their directors. Individuals must now meet higher standards of transparency, implement more comprehensive reporting, and ensure full cooperation with authorities and enforcement agencies. Directors must ensure there are adequate anti-money laundering, counter terrorist financing and proliferation financing procedures in place to deal with greater scrutiny and oversight from authorities, harsher penalties for non-compliance, and the heightened enforcement risks that now exist in the UAE’s rapidly developing regulatory landscape.

The practical implications of the New Legislation will become clearer once the Cabinet resolutions are passed in 2026. We will also keep a close eye on how existing supervisory regimes, such as Dubai Financial Services Authority, adapt to take account of the New Legislation.

If you have any questions relating to the information discussed in this article, or to learn more about how we can assist you and your business to navigate these evolving risks, please contact Nathan Penny-Larter, Lyndon Richards or Sevir Mandair.