In every global financial centre there comes a moment when regulation stops being a list of requirements and becomes a structural recalibration of how an economy expects people and institutions to behave. The UAE has now entered that moment. With the issuance of Federal Decree by Law No. 10 of 2025 Regarding Anti Money Laundering, Combating the Financing of Terrorism, and Proliferation Financing, the country has rewritten the rules of financial integrity across all sectors. This is not a light revision of the 2018 AML framework. It is a reengineering of how the UAE intends to protect its economy, its institutions, and its international reputation.
The decree establishes a new legal and operational architecture that touches every part of the economic system. Banks are affected. DNFBPs are affected. Virtual asset service providers are affected. Registrars, non profit organisations, legal arrangements, and every entity that handles or processes funds in any meaningful way is affected. The law expands obligations, accelerates enforcement powers, and creates deeper interconnectivity between supervisory bodies. It also transforms what it means to manage risk, not in theory but in the everyday work of onboarding clients, monitoring transactions, and determining beneficial ownership.
The UAE has sent a clear message. Economic growth and regulatory strength are not competing values. They reinforce each other. In a global environment where regulatory scrutiny has become a measure of credibility, the decree positions the UAE as a jurisdiction that intends not only to meet international expectations but to set a higher standard for the region.
This article examines the deeper implications of the new AML framework. It explores the shift in risk responsibility, the operational expectations that now apply to all sectors, the expanding definition of transparency, and the strategic opportunities the law creates for institutions that take compliance seriously.
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The 2025 decree is written for a world that no longer operates in linear transactions. Financial flows move instantly. Virtual assets cross borders without friction. Criminal networks use technology with increasing sophistication. Sanctions change with geopolitical dynamics that evolve daily. The decree acknowledges this reality by expanding the powers and connectivity of supervisory authorities, law enforcement, and the Financial Intelligence Unit.
The FIU is granted broader powers to request information, freeze assets, and coordinate internationally. Supervisory authorities must conduct their own risk assessments, perform both field and desk inspections, and verify that institutions are applying risk based controls. Law enforcement is explicitly empowered to use undercover operations, controlled deliveries, digital tracing techniques, and seizure or freezing mechanisms without prior notice. The decree even states that confiscation orders from foreign courts can be executed without national investigation when conditions are met.
These developments signal a systemic shift. Compliance in the UAE is no longer reactive. It is anticipatory. It is intelligence driven. It is designed to detect and disrupt financial crime before it embeds itself in the economic system, not after.
The decree creates a multilayered ecosystem in which information moves more freely among regulators, law enforcement, and international partners. It is a model that mirrors the most advanced regulatory systems globally and positions the UAE as an active participant in international AML coordination.
One of the most significant conceptual developments in the new decree is the expansion of what it means to own risk. Traditionally, institutions viewed AML compliance as something that happened at onboarding and at periodic review. The new decree does not support that mindset. It reframes risk ownership as an ongoing, dynamic responsibility that applies to every stage of a client relationship and every touchpoint involving funds.
Financial institutions, DNFBPs, and virtual asset service providers must identify, assess, document, and continuously update their exposure to money laundering, terrorist financing, and proliferation financing. These assessments cannot be static reports filed for the purpose of inspection. They must reflect live risk conditions, national risk assessments, industry developments, and emerging typologies.
Institutions must also implement customer due diligence measures proportionate to their assessed risks. They must monitor clients continuously, not merely at onboarding. They must refrain from opening or maintaining anonymous or fictitious accounts. They must maintain policies and controls approved by senior management. They must apply targeted financial sanctions instantly and without delay.
The decree makes something else equally clear. If risk is mishandled, penalties will reflect the severity of the failure. Administrative fines can reach five million dirhams per violation. Criminal penalties can include imprisonment, multi million dirham fines, and even dissolution of the legal entity in extreme cases. For foreign offenders, deportation becomes mandatory for serious crimes.
Compliance is no longer an administrative function. It is a governance function. Institutions that fail to recognise this shift expose themselves to regulatory, financial, and reputational consequences that cannot be absorbed as routine business costs.
Perhaps the most internationally significant feature of the decree is the treatment of transparency. Beneficial ownership has become the global currency of trust. Jurisdictions that cannot produce accurate and timely beneficial ownership data are increasingly viewed as high risk. The UAE recognises this and has built a transparency framework that applies across companies, trusts, and other legal arrangements.
Institutions must identify the natural persons who exercise ultimate effective control over the customer, whether directly or through layers of ownership. They must understand the purpose of the business relationship. They must maintain updated information on ownership structures. They must ensure that nominee directors and nominee shareholders are not used to obscure true control. The Registrar is also assigned clear responsibilities concerning the accuracy of registered information.
These requirements align the UAE more closely with Financial Action Task Force expectations and with the beneficial ownership standards emerging across the European Union, the United Kingdom, Singapore, and other major financial centres. They also create operational challenges. Many entities operating in high complexity regions do not have transparent ownership structures. Some exist across jurisdictions with limited public information. Others rely on legal arrangements that are legitimate but opaque.
This is where risk based due diligence becomes essential. Institutions must understand not only the legal form but the real world control dynamics behind clients and counterparties. Without that clarity, other elements of compliance, including suspicious transaction monitoring and targeted financial sanctions, become less reliable.
The decree introduces enforcement mechanisms that significantly raise the cost of non compliance. Freezing of assets can occur without prior notice. Transactions can be suspended for up to ten working days while the FIU analyses suspicious reports. Seizures can be ordered by the Public Prosecution and the courts. Travel bans can be imposed as part of investigative measures. Undercover operations and controlled deliveries can be used to dismantle criminal activity.
These provisions demonstrate that the regulatory philosophy of the UAE is no longer centred on supervision alone. It is built on enforcement. The deterrent effect is clear. Entities that fail to comply will face consequences that affect their operations, their licences, their leadership, and in severe cases, their existence.
This does not mean the law is intended to punish institutions unnecessarily. It means institutions are expected to have governance frameworks strong enough to prevent misconduct. Compliance must be embedded at the level of culture and decision making, not simply in policies written for inspection.
Global AML regimes have evolved dramatically over the past decade. Countries that once viewed AML as a regulatory obligation now see it as a national competitiveness issue. Strong AML frameworks attract investment. Weak frameworks repel it. The most important capital in global finance is trust, and trust is built on transparency, accountability, and enforceability.
The UAE’s new decree demonstrates a clear policy intention. The country understands that its role as a financial and trading hub depends on more than economic growth. It depends on the confidence of global partners, international regulators, and markets that handle trillions of dollars.
By adopting a broader definition of predicate offences, reinforcing the powers of the FIU, integrating non profit organisations and virtual asset service providers into the AML ecosystem, and enhancing international cooperation mechanisms, the UAE signals that its compliance framework is fully aligned with global expectations.
This alignment is not only about regulatory compliance. It is about shaping a future in which the UAE remains a preferred jurisdiction for banking, investment, trade, logistics, and digital asset innovation.
Regulation can be viewed in two ways. Some institutions see it as cost. Others see it as infrastructure that protects the sustainability of their business. The new decree rewards the latter mindset.
Institutions that strengthen their internal controls now will reduce their exposure to future penalties. Those that invest in accurate data and continuous monitoring will catch risks before they escalate. Those that build integrated onboarding, verification, and monitoring systems will be faster, more reliable, and more trusted by regulators and counterparties.
There is also a competitive advantage. Clients increasingly choose banks and service providers that demonstrate strong governance. Investors prioritise jurisdictions that reduce exposure to reputational damage. Multinationals prefer operating environments that align with international expectations.
Compliance is not a defensive posture. It is a strategic differentiator.
The UAE’s 2025 AML decree is more than regulatory tightening. It is the foundation of a new financial identity. It signals that the UAE intends to be a jurisdiction where innovation is encouraged but not at the expense of integrity, where growth is pursued but not at the expense of stability, and where transparency is a shared responsibility across all economic actors.
The decree sets a direction for the future. Institutions must decide whether to follow it passively or embrace it actively. Those that choose the latter will find themselves better positioned not only for compliance but for long term success in an increasingly regulated world.