UAE's New AML Law Raises Stakes for DNFBPs With Criminalised False UBO Reporting and AED 100 Million Penalty Ceiling

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UAE criminalises false UBO reporting under new AML law. AED 100M penalty ceiling and faster bank freezes raise stakes for DNFBPs.

Federal Decree-Law No. 10 of 2025 replaced the UAE's entire 2018 AML framework, lowering the evidentiary threshold for money laundering and expanding the tipping-off offence.
Providing false or misleading beneficial ownership information is now a standalone criminal offence carrying imprisonment and fines.
The maximum criminal fine for legal persons has been raised to AED 100 million, with no statute of limitations on financial crime offences.
Ministry of Economy inspections identified over 1,000 DNFBP violations in H1 2025, resulting in AED 42 million in penalties.
UAE banks are freezing corporate accounts faster where beneficial ownership documentation is missing or transaction patterns are unexplained.
Advisors in business structuring, family office operations, and corporate governance face direct criminal and regulatory exposure under the reformed regime.

Enforcement Intensifies Ahead of the UAE's FATF Mutual Evaluation in 2026

Federal Decree-Law No. 10 of 2025 replaced the UAE's 2018 anti-money laundering framework in its entirety when it came into force on 14 October 2025. Supported by executive regulations under Cabinet Resolution No. 134 of 2025 from 14 December 2025, the law reshaped compliance obligations for designated non-financial businesses and professions (DNFBPs) across mainland and commercial free zones. It introduced criminal liability for false Beneficial Owner Register entries, lowered the bar for money laundering prosecutions, and raised the corporate penalty ceiling to AED 100 million.

Ministry of Economy compliance inspections have already demonstrated the practical reach of the reformed regime. Over AED 42 million in fines were imposed on DNFBPs in the first half of 2025 alone, spanning precious metals dealers, real estate brokers, and corporate service providers. Banks have responded by freezing accounts of entities lacking current beneficial ownership documentation, compressing the timeline between a compliance gap and an operational crisis. For specialists in business advisory, family office structuring, corporate governance, and ESG reporting, the exposure is both immediate and material.

What the 2025 Law Changed for Money Laundering and Financial Crime

Federal Decree-Law No. 10 of 2025 is not an amendment to the previous AML framework. It repealed Federal Decree-Law No. 20 of 2018 outright and replaced it with a law covering money laundering, terrorist financing, and - for the first time - proliferation financing as a standalone offence. The law was published in the Official Gazette on 30 September 2025 and came into force two weeks later.

At the heart of the reform is a fundamental shift in how prosecutors must prove money laundering. Under the 2018 law, actual knowledge that funds were proceeds of crime had to be established. Under Article 2 of the 2025 law, knowledge can be inferred from objective circumstances. A person who should have known that funds were illicit - given available warning signs - now faces the same criminal liability as one who knew for certain.

In parallel, the tipping-off offence has been broadened. Article 29 now extends liability to grossly negligent disclosures, not just intentional ones. Penalties are aggravated where the offence leads to loss or destruction of criminal proceeds. For practitioners, an informal reference to a suspicious transaction report (STR) during a client conversation could constitute a criminal act.

In addition, the penalty ceiling for legal persons has been significantly raised. Criminal fines now range from AED 5 million to AED 100 million for money laundering convictions, and may exceed the value of criminal property involved. The law also expanded predicate offences to include direct and indirect tax evasion. Financial crime offences carry no statute of limitations, and courts may order entity dissolution in serious cases.

False UBO Reporting Is Now a Criminal Offence

Cabinet Decision No. 109 of 2023 requires every UAE company to create and maintain a Beneficial Owner Register within 60 days of receiving its licence or registration. Any change to beneficial ownership must be reported within 15 days. The register must record each owner's full name, nationality, date and place of birth, residential address, and the nature of ownership or control.

Against this backdrop, Federal Decree-Law No. 10 of 2025 elevated the consequences of non-compliance. Providing false or misleading beneficial ownership information is now a standalone criminal offence carrying imprisonment and a fine of at least AED 20,000. The liability extends to the person supplying the data and, potentially, to regulated entities that accept it without adequate verification.

To reinforce this framework, Cabinet Resolution No. 134 of 2025 defines nominee shareholders and nominee directors explicitly. Nominees holding formal titles without corresponding economic interest cannot be treated as beneficial owners. Regulated entities must look through nominee structures to identify the true owner and apply enhanced due diligence where multi-layered arrangements exist.

Separately, administrative penalties for UBO non-compliance are governed by Cabinet Decision No. 132 of 2023. Fines range from AED 40,000 to AED 100,000 for failure to maintain or update the register, with higher brackets for repeated violations. Persistent non-compliance may trigger licence suspension, operational closure, or referral to criminal prosecution. These administrative penalties now operate alongside the criminal sanctions introduced by the 2025 law, creating dual-track enforcement exposure.

Enforcement Data Confirms the Regime Has Teeth

The Ministry of Economy imposed over AED 42 million in fines on DNFBPs during the first half of 2025, identifying more than 1,000 compliance violations. Precious metals dealers accounted for 473 violations and AED 20 million in penalties. Real estate brokers faced 495 violations totalling AED 18.5 million. Corporate service providers and auditors incurred over AED 4 million across 95 cases.

These figures sit within a broader enforcement trajectory that has been building since late 2022. In 2023, the Ministry fined 225 DNFBP companies a combined AED 76.9 million. A further AED 22.6 million was imposed on 29 firms in early 2024. Cumulative DNFBP penalties since late 2022 now exceed AED 130 million. Earlier rounds of tightened AML rules for real estate, precious metals, and crypto-linked DNFBPs set the enforcement precedent that the 2025 law has since reinforced.

Operational suspensions have added pressure beyond financial penalties. In Q3 2023, the Ministry suspended 50 DNFBP establishments for three months specifically for failure to register on goAML, the Financial Intelligence Unit's reporting portal. That decision disrupted an estimated 2,500 work days and signalled that non-registration alone could halt business operations entirely.

Looking ahead, the FATF's fifth-round mutual evaluation of the UAE is expected in mid-2026. Unlike earlier rounds that focused primarily on whether appropriate laws were in place, this evaluation assesses whether enforcement produces tangible outcomes. Every fine and suspension issued in 2025 and 2026 serves as evidence of a functioning regime. That dynamic means enforcement intensity is unlikely to ease before or after the review.

Bank Account Freezing Has Become the Faster Consequence

While Ministry of Economy inspections follow a planned timeline, banks are acting sooner. UAE banks now routinely freeze corporate accounts where beneficial ownership documentation is missing, transaction patterns do not match the entity's declared business activity, or large transfers lack supporting justification. Freezes are applied without prior notice, meaning businesses discover the restriction through failed transactions.

For firms with payroll commitments, supplier obligations, or trade finance requirements, an account freeze creates an immediate operational crisis. This consequence typically arrives months before any regulatory fine. The banking sector's response reflects its own CBUAE-supervised compliance obligations, and banks now treat an unregistered DNFBP as a flagged counterparty requiring enhanced scrutiny.

As a result, advisors are increasingly treating bank relationship management as part of their AML compliance strategy. Ensuring that clients maintain up-to-date beneficial ownership documentation, file timely changes with the registrar, and hold active goAML registration has become as important for operational continuity as it is for regulatory compliance.

Practical Steps for Business Advisors, Family Offices, and Corporate Governance Teams

Specialists in business advisory, family office structuring, corporate governance, and ESG reporting face direct exposure under the reformed regime. Their clients typically involve complex ownership structures, cross-border holdings, and multi-entity arrangements that demand precise and timely UBO maintenance. Under the 2025 law, an advisor who knowingly participates in a false beneficial ownership declaration faces imprisonment. Even accepting client-provided ownership data without adequate verification creates regulatory and criminal risk.

The practical response starts with treating UBO compliance as a board-level risk management issue rather than an administrative filing task. Advisors should audit existing beneficial owner registers against Cabinet Decision No. 109, verify that nominee arrangements are properly disclosed, and confirm goAML registration for any entity in a DNFBP category. Where gaps exist, the 15-day change reporting window means that remediation must begin immediately.

Equally important is the documentation trail. Advisors should ensure that enterprise-wide risk assessments are tailored to actual client profiles rather than copied from templates. Training records, screening evidence, and STR filing logs should be accessible in a single compliance pack. Ministry of Economy inspectors have demonstrated that they actively flag generic documentation, and firms operating within the GCC's evolving corporate criminal liability framework should anticipate heightened scrutiny of their internal controls.

What Clients are Asking their Advisors

What is the maximum AML penalty for a UAE company under the 2025 law?

Under Federal Decree-Law No. 10 of 2025, the maximum criminal fine for a legal person convicted of money laundering, terrorist financing, or proliferation financing is AED 100 million. Fines can also match or exceed the value of the criminal property involved, meaning the effective ceiling may be higher in specific cases.

Can a company director face criminal charges for incorrect UBO filings in the UAE?

Yes. The 2025 law treats false or misleading beneficial ownership information as a standalone criminal offence carrying imprisonment and a fine of at least AED 20,000. Liability extends to the individual providing the data and potentially to regulated entities that accept declarations without adequate verification.

How quickly must a UAE company update its Beneficial Owner Register after an ownership change?

Under Cabinet Decision No. 109 of 2023, any change to beneficial ownership must be reported within 15 days of the company becoming aware of the change. New companies must establish their register within 60 days of their licence or registration date.

Are UAE banks freezing company accounts for AML compliance failures?

Banks are applying account freezes without prior notice where beneficial ownership documentation is missing, transaction patterns are unexplained, or activity does not match the entity's declared business purpose. Maintaining current beneficial ownership records and goAML registration is the most effective way to reduce this risk.