135 Views

The United Arab Emirates has made significant strides in strengthening its Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework in recent years. As a major global financial hub, the UAE is committed to maintaining the integrity of its financial system and aligning with international standards set by the Financial Action Task Force (FATF). With regulatory bodies such as the UAE Financial Intelligence Unit (FIU) and the Executive Office of AML/CFT driving reforms, businesses across various sectors are under increasing pressure to implement enhanced compliance programs. This blog explores the evolving AML/CFT landscape in the UAE, key regulatory developments, and what organisations must do to remain compliant in this dynamic environment. 

The UAE’s Evolving AML/CTF Landscape 

The UAE’s removal from the FATF grey list in 2024 reflects its strengthened commitment to combating financial crime. Key reforms include: 

  • Strengthened supervision of Virtual Asset Service Providers (VASPs) and updated measures to be applied by Designated Non-Financial Businesses and Professions (DNFBPs) and financial institutions 
  • Heightened enforcement actions and prosecution of money laundering cases
  • Improved transparency of Beneficial Ownership through national registers
  • Expanded financial intelligence capabilities and cooperation with global counterparts

Despite delisting, the UAE remains under global scrutiny, and entities must maintain comprehensive, risk-based AML/CFT frameworks. 

free-pep-check

Core AML/CFT Obligations in the UAE 

A risk-based approach underpins compliance, requiring entities to tailor measures to their risk profile, size, and sector. 

Applicable Laws & Regulations: 

  • Federal Decree-Law No. (20) of 2018 (AML/CFT Law) 
  • Cabinet Decision No. (10) of 2019 (Executive Regulations) 
  • Beneficial Ownership Rules (Cabinet Decision No. 58 of 2020; No. 109 of 2023) 

Key Requirements: 

  • Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) 
  • Suspicious Transaction Reporting (STR) to the UAE FIU 
  • Sanctions screening against UN, UAE, and global lists 
  • Beneficial Ownership identification via UBO Registers 
  • Ongoing transaction monitoring and record-keeping (min. 5 years) 
  • Enhanced controls for high-risk sectors such as real estate, precious metals, and virtual assets 

sanctions-check

The Cost of Non-Compliance in the UAE 

Recent enforcement shows the consequences of falling short: 

  • In August 2024 and April 2025, the UAE Central Bank imposed financial sanctions on two banks operating in the UAE for AML/CTF violations. 
  • The DFSA in 2024 has taken eight enforcement actions and issued 24 alerts against individuals and entities that performed unauthorised financial activities, misled investors and failed to comply with AML obligations. 
  • The UAE Securities and Commodities Authority (SCA) imposed AED 1.15 million in fines since January 2025 on companies for regulatory breaches, including AML/CFT violations and unauthorised activities. 

With increasing regulatory scrutiny, non-compliance carries not just financial penalties – but reputational and licensing risks. 

Key Challenges for Compliance Teams in the UAE 

  • Complex Ownership Structures: Identifying UBOs across offshore entities and layered corporate networks remains a significant challenge. 
  • Heightened Regulatory Scrutiny: Regulators, including the Central Bank and DFSA, are intensifying inspections with penalties for non-compliance rising. 
  • Emerging Financial Crime Risks: Virtual assets, TBML, and gold markets continue to evolve, presenting new avenues for illicit finance. 
  • Operational Inefficiencies: Fragmented systems and manual processes strain resources, increasing false positives and compliance fatigue.  
  • Resource and Expertise Gaps: Despite advancements, some organisations face challenges related to limited compliance resources and expertise.

Conclusion

The UAE’s AML/CFT framework is evolving rapidly, and businesses must keep pace to remain compliant and competitive. A proactive approach to compliance not only helps reduce the risk of regulatory penalties and reputational damage but also reinforces trust with customers and partners. By embedding strong AML/CFT practices into daily operations and using the right tools, organisations can confidently navigate the regulatory landscape and support the UAE’s mission to combat financial crime.

contact-us