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Federal Decree Law No. 10 of 2025 overhauls the UAE’s AML, CTF and proliferation financing framework. It repeals and replaces Federal Decree Law No. 20 of 2018, reinforcing the UAE’s commitment to the Financial Action Task Force’s (FATF’s) 40 Recommendations, which are the global standard for combatting money laundering, terrorist financing, and the financing of weapons of mass destruction.

The new law creates new offences related to financing terrorism through digital systems, virtual assets or encryption technologies; lowers the threshold for evidence relating to money laundering, terrorism funding and proliferation funding; introduces larger fines and prison sentences; launches a new oversight body; increases investigative and enforcement powers for authorities; and expands compliance obligations for organisations.

Marie Chowdry, a financial services regulation expert at Pinsent Masons, said that with the new law, the UAE “has taken a decisive step in fortifying its financial integrity”.

“By expanding the scope of predicate offences, lowering evidentiary thresholds, and integrating digital assets into the AML/CTF framework, the law reflects a sophisticated understanding of emerging financial risks.”

“The inclusion of virtual assets and the extension of limitation periods in the UAE’s new AML law are game-changing developments,” she said.

“As digital finance continues to evolve, the law’s broader scope ensures that virtual asset service providers (VASPs) are now firmly within the regulatory perimeter. This is a critical step in closing gaps that previously allowed illicit actors to exploit emerging technologies.”

The new law clarifies that terrorism funding offences can be committed by anyone through digital systems, virtual assets or encryption technologies if they know, even if implied, that the funds will be used for terrorism, aiming to ensure that crypto, fintech and dual-use goods businesses are within the scope of the UAE’s counter-terrorism framework.

Fines for organisations have been expanded from AED50 million (approx. US$13.6 million) to AED100 million and individuals can be imprisoned for up to 10 years under the new, tougher penalties. There is also no limitation period for money laundering, terrorism funding and proliferation offences.

Chowdry said: “The extension of limitation periods for prosecuting AML offences reflects a more realistic approach to complex financial investigations, which often span years and jurisdictions.”

“This means greater exposure and longer liability windows, making it essential to maintain rigorous compliance and documentation practices,” she said.

“These updates not only enhance the UAE’s global standing but also signal a more assertive enforcement environment. Businesses should act swiftly to align with the new standards.”

Under the new law, “sufficient evidence or circumstantial evidence” is enough, and knowledge can be inferred from the “factual and objective circumstances”. This means that money laundering, terrorism funding and proliferation funding offences can be committed if a person knew, or should have known, that an offence would be committed, aligning the UAE with other jurisdictions such as the UK.

Financial institutions, designated non-financial businesses and professions (DNFBPs) such as lawyers and accountants, VASPs and non-profit organisations are also now subject to mandatory beneficial ownership and risk assessment requirements.

Lana Akkad, a financial regulation expert at Pinsent Masons, said: “By lowering the evidentiary threshold and expanding the scope of criminal liability, the law empowers enforcement agencies to act more decisively against financial crime.

“For financial institutions, DNFBPs, and VASPs, this means a heightened need for robust compliance frameworks, especially around digital assets and cross-border transactions,” she said.

“Businesses should immediately review their AML policies, enhance due diligence procedures, and ensure their teams are trained on the new legal standards.”

The law creates a new ‘supreme committee’ to oversee the National Committee for Combatting Money Laundering and the Financing of Terrorism and Proliferation, which has the mandate to introduce national strategies to improve regulatory compliance, assess crime risks, exchange information with domestic and international authorities, propose relevant regulation and represent the UAE internationally.

Akkad said: “The creation of a Supreme Committee also signals a more coordinated national approach, which will likely lead to increased scrutiny and enforcement. Proactive compliance is no longer optional: it’s a strategic imperative.”

Under the law, the Financial Intelligence Unit, a central agency responsible for gathering, analysing and disseminating intelligence related to suspicious transactions, can now freeze funds for up to 30 days compared to the previous seven, and suspend transactions for up to 10 business days without prior notice.