The New UAE AML Law 2025: Key Amendments And Compliance Obligations For VASPs

KEY TAKEAWAYS

• The New AML Law replaces the 2018 framework, retaining existing regulations where consistent while broadening the statutory base.
• Predicate crimes now include terrorism and proliferation financing and tax evasion. The definition of criminal property is widened, and money laundering is expressly recognised as occurring through digital systems, virtual assets, and encryption technologies.
• VASPs receive clear statutory recognition and are subject to full preventive obligations, including due diligence, monitoring, and direct FIU reporting, placing them on par with banks and DNFBPs.
• The FIU gains stronger powers to suspend transactions, freeze assets, and exchange information with foreign counterparts.
• Prosecutors can now rely on circumstantial evidence to prove money laundering, lowering the evidentiary threshold and enhancing enforcement capability.
• Penalties are tougher, introducing mandatory prison terms and higher fines, especially for serious or repeated offences.

INTRODUCTION

The Federal Decree-Law No. 10 of 2025 ("New AML Law") was issued on 30 September 2025 and came into effect on 14 October 2025. It repeals certain provisions of the Federal Decree-Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations ("2018 AML Law"). The existing executive regulations, circulars, and decisions issued under the 2018 law, including Cabinet Resolution No. 10 of 2019, remain applicable to the extent that they do not conflict with the new statute¹.

The New AML Law broadens the scope of offences, incorporates targeted financial sanctions directly into primary legislation, and enhances the authority of the Financial Intelligence Unit ("FIU"). It also brings Virtual Asset Service Providers ("VASPs") firmly within the Anti-Money Laundering ("AML"), Counter-Terrorism Financing ("CTF"), and Proliferation Financing ("PF") framework. These updates reflect the UAE's continued commitment to align its regulatory regime with FATF recommendations and to strengthen the resilience and integrity of its financial ecosystem.

In this article, we examine the key structural changes introduced by the New AML Law and their implications for VASPs in particular.

A QUICK GLANCE: UPDATED DEFINITIONS

The title of the New AML Law has been expanded to include the financing of the proliferation of arms and weapons of mass destruction. Proliferation of arms refers to the unlawful circulation of materials, systems, components, programs, or technology that support weapons of mass destruction, including dual-use items. As a result, sanctions processes in the UAE must now account for proliferation risk in addition to terrorism risk, including screening against Executive Office lists.

To clarify this, weapons of mass destruction are defined to include nuclear, biological, chemical, and radiological weapons capable of harming large segments of humanity.

The scope of predicate crimes has been broadened to cover any felony or misdemeanour. This now expressly includes terrorist financing, the financing of arms proliferation, and both direct and indirect tax evasion, even when the conduct occurs abroad, provided it is punishable in both jurisdictions.

The law also confirms that money laundering and terrorist financing may be carried out through digital systems, virtual assets, or encryption technologies.

Targeted financial sanctions are now clearly defined, linking freezing and prohibition obligations to the UAE Cabinet's terrorist lists and UN Security Council measures adopted under Chapter VII of the UN Charter.

New definitions are introduced for terrorist, terrorist act, terrorism financing, and terrorist organisation. The offence of terrorism financing is expanded to include funding through digital systems and virtual assets, as well as financing related to travel or training activities.

The concept of criminal property has been consolidated to encompass proceeds, instrumentalities, and funds used or intended for terrorism or proliferation financing, as well as the proceeds of such crimes. This broadens the range of assets that may be frozen, seized, or confiscated.

The distinction between freezing and seizure has also been refined. Freezing prohibits the transfer or movement of criminal funds or property while allowing them to remain with their owner or possessor. Seizure, on the other hand, imposes similar restrictions but transfers effective control and management to the competent authority.

Asset recovery is defined as the complete process of identifying, tracing, valuing, seizing, freezing, confiscating, and enforcing orders over criminal property or its equivalent value. This applies to both original assets and equivalent-value orders.

Finally, the law introduces the concepts of trust fund, testator, and trustee to bring trust-style arrangements explicitly within the AML framework, clarifying who settles, owns, and controls such funds.

VIRTUAL ASSET SERVICE PROVIDERS WITHIN THE AML FRAMEWORK

The principal structural change introduced by the New AML Law is the explicit and comprehensive integration of Virtual Asset Service Providers (VASPs) into the AML/CFT/CPF regulatory framework. While the 2018 AML Law made only indirect references to virtual assets, the new law elevates VASPs to an equal regulatory standing with traditional financial institutions and designated non-financial businesses and professions (DNFBPs) across its substantive provisions.

Article 1 of the New AML Law defines a VASP as "a natural or legal person who conducts, as a business, one or more of the virtual asset activities specified in the Executive Regulations of this Decree-Law." Virtual assets themselves are defined as "a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purposes, but does not include digital representations of paper currencies, securities, or other funds²." This definitional precision establishes clear jurisdictional authority for VASP regulation while maintaining distinctions between virtual assets, traditional securities, and central bank digital currencies.

The law now expressly recognises that money laundering, terrorism financing, and proliferation financing offences may be committed "through digital systems, virtual assets, or encryption technologies." This clarification removes prior ambiguity regarding the applicability of criminal law provisions to virtual asset-based financial crimes.³.

VASPs are subject to the full range of preventive obligations under Article 19, including customer due diligence, beneficial ownership identification, record-keeping, sanctions screening, and ongoing transaction monitoring to assess and mitigate risk. Their express inclusion within the suspicious transaction reporting regime of Article 18 imposes a direct duty to report suspected criminally-derived funds to the Financial Intelligence Unit⁴.

THE ENHANCED ROLE OF THE FINANCIAL INTELLIGENCE UNIT

The New AML Law significantly expands the FIU operational powers and institutional importance. It authorises the FIU Head to order transaction suspensions for up to ten (10) working days and asset freezes for thirty days, extendable by the Public Prosecutor, on suspicion of criminal connection, and without prior notice.⁵. This marks a notable expansion from the 2018 AML Law, which granted such authority to the Central Bank Governor and limited the freezing period to seven days.

The FIU's institutional mandate is also substantially broadened. The new law grants the FIU explicit authority to request additional information from financial institutions, DNFBPs, and VASPs. It further establishes a framework for both spontaneous and reciprocal information exchange with foreign FIUs and competent authorities, independent of reciprocity requirements or formal treaties⁶.

The FIU is now required to establish secure databases supported by robust information security and cybersecurity measures. Its enhanced information-exchange powers enable operational-level cooperation that reflects the realities of instantaneous cross-border capital movement. In practice, the FIU can now aggregate suspicious transaction reports across the entire regulated sector and integrate this data with inputs from foreign counterparts and domestic agencies. This expanded visibility provides a more comprehensive view of cross-sector and cross-border financial flows that may be linked to money laundering, terrorism financing, or proliferation-financing investigations⁷.

OFFENCES, PREDICATE CRIMES, AND EVIDENTIARY STANDARDS

The Expanded Concept of Predicate Crime and Proliferation Financing

The New AML Law broadens the scope of predicate offences to include both terrorism financing and proliferation financing. This expansion establishes a legal framework under which criminal proceeds derived from these activities can be prosecuted through distinct money laundering charges, closing potential prosecutorial gaps that existed under the previous framework.

Lowered Evidentiary Thresholds

A major prosecutorial enhancement appears in the revised knowledge element for money laundering offences. Article 2(1) now provides that a person commits money laundering if they "know, or have sufficient evidence or circumstantial evidence to support their knowledge" that funds are derived from a predicate crime⁸. This departs from the 2018 AML Law's exclusive reliance on direct knowledge, introducing an objective basis for establishing criminal intent through circumstantial evidence.

This approach is reinforced by the principle that "knowledge, as an element of the crime, is inferred from the factual and objective circumstances of its commission⁹." Similarly, Article 3(4) states that knowledge for terrorism financing and proliferation financing offences "is derived from the factual and objective circumstances of their commission¹⁰." Together, these provisions create a unified evidentiary framework that acknowledges the practical challenges of proving subjective intent directly. They allow courts to infer knowledge from transaction patterns, counterparties, and other objective indicators. This alignment with international standards significantly enhances prosecutorial flexibility in addressing complex and sophisticated financial crime schemes.

PENALTIES AND SANCTIONS FRAMEWORK

The New AML Law introduces significantly tougher penalties, including mandatory prison terms for money laundering offences and higher fines that are often proportionate to the value of the criminal property involved.

For ordinary money laundering, penalties include a minimum of one year's imprisonment and substantial fines. Where aggravating factors exist, such as involvement in organized crime or abuse of position, these penalties can escalate to up to fifteen years' imprisonment, with fine limits doubled accordingly.¹¹

Offences related to terrorism financing and proliferation financing attract even harsher punishment. These may result in life imprisonment and heavy financial penalties, along with additional measures such as the mandatory dissolution of legal entities involved.¹²

Corporate offenders and their managers face direct liability. Companies may be fined up to AED 100 million, and individuals responsible can also be prosecuted if they knew, or should have known, about the illegal activity. Administrative sanctions further reinforce compliance obligations, ranging from license suspension or revocation to significant fines for control failures, thereby strengthening AML/CTF enforcement across the regulated sector.¹³

The law also introduces a specific penalty for VASPs that offer anonymity-enhanced cryptocurrencies or otherwise prevent authorities from tracing transactions.¹⁴ Another new penalty applies to the provision of false or inaccurate information regarding the ultimate beneficial owner ("UBO") when requested by a competent authority, financial institution, DNFBP, or VASP.¹⁵

Finally, the maximum penalty for a VASP operating without a licence or registration has been effectively doubled, from five million dirhams to ten million dirhams.¹⁶

ENHANCED INTERNATIONAL COOPERATION

The New AML Law significantly strengthens international cooperation by narrowing the permissible grounds for refusing assistance requests. It eliminates both the "political offence" exception and the broad reliance on confidentiality protections as bases for refusal, except where information is protected by legal professional privilege.¹⁷ This marks a notable improvement over the 2018 AML Law framework, which had allowed refusals based on "political" considerations and ongoing domestic investigations.

The law further provides that foreign judicial orders for provisional measures or confiscation of criminal property "may be executed without conducting a national investigation." This provision establishes direct recognition and enforcement of foreign criminal judgments and confiscation orders, substantially accelerating cross-border asset recovery processes.¹⁸

Article 21(4) comprehensively outlines mutual legal assistance obligations, expressly extending them to VASPs in addition to traditional financial institutions, non-profit organisations, and government entities. The explicit inclusion of VASPs demonstrates a clear legislative intent to ensure that virtual asset-related financial crimes receive the same treatment as traditional financial crimes in international cooperation efforts.¹⁹

WAY FORWARD

The introduction of the revised UAE AML Law comes at a pivotal time, both for the country's continued development as a leading global financial hub and amid a period of heightened international scrutiny.

The New AML Law provides a clear statutory framework for concepts that were previously addressed only in guidance or practice. For market participants, this offers a more predictable compliance baseline, though one that will inevitably be tested through implementation, supervision, and enforcement. For VASPs in particular, the law confirms that they are no longer peripheral to the federal AML regime. They now stand alongside banks and DNFBPs within the core operative provisions, face direct reporting and information-sharing obligations with the FIU, and are subject to the same combination of criminal, administrative, and international cooperation mechanisms. This alignment will shape how virtual asset business models are structured, how risks are priced, and how governance expectations for founders and senior management are defined.

VASPs that had already implemented the 2018 AML Law and aligned their programmes closely with Cabinet Resolution No. 10 of 2019 may not need to redesign their systems from scratch. In most cases, the changes will be incremental, focused on updating policies, risk assessments, sanctions and screening processes, suspicious transaction reporting procedures, and governance documentation.

Footnotes

1 Article 41, Federal Decree-Law No. 10 of 2025 Regarding Combating Money Laundering Crimes, Combating the Financing of Terrorism and the Financing of Arms Proliferation ("Federal Decree-Law No. 10 of 2025 "), issued on 30 September 2025, United Arab Emirates.

2 Article 1, Federal Decree-Law No. 10 of 2025

3 Article 2 and 3, Federal Decree-Law No. 10 of 2025

4 Article 18 and 19, Federal Decree-Law No. 10 of 2025

5 Article 5, Federal Decree-Law No. 10 of 2025

6 Article 11(1), Federal Decree-Law No. 10 of 2025

7 Article 11(2), Federal Decree-Law No. 10 of 2025

8 Article 2(1), Federal Decree-Law No. 10 of 2025

9 Article 2(3), Federal Decree-Law No. 10 of 2025

10 Article 3(4), Federal Decree-Law No. 10 of 2025

11 Article 26(1) and 26(2), Federal Decree-Law No. 10 of 2025

12 Article 26(3) and 26(4), Federal Decree-Law No. 10 of 2025

13 Article 27, Federal Decree-Law No. 10 of 2025

14 Article 30, Federal Decree-Law No. 10 of 2025

15 Article 35, Federal Decree-Law No. 10 of 2025

16 Article 32, Federal Decree-Law No. 10 of 2025

17 Article 21, Federal Decree-Law No. 10 of 2025

18 Article 21(2), Federal Decree-Law No. 10 of 2025

19 Article 21(4), Federal Decree-Law No. 10 of 2025

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