The UAE’s latest amendments and enforcement trends for money laundering

Money laundering is high on the regulatory agenda of the UAE government. In the last few months, there have been two major changes to the regulatory landscape in the UAE. First, in August 2024, the UAE Federal Law on anti-money laundering (AML) was amended.[1] The amendments are aimed at strengthening compliance mechanisms and coordination between businesses and regulators. Second, in September 2024, the UAE Cabinet approved the new National Strategy for Anti Money Laundering, Countering Terrorism Financing and Proliferation Financing (CTF&PF) for 2024-27. This strategy builds on previous efforts to fight money laundering, while placing a stronger emphasis on combating cybercrime, regulating virtual assets, and fostering public-private partnerships. These amendments will encourage regulators in the UAE to further increase their efforts in combatting money laundering and terrorism/proliferation financing.

Amendments to the UAE Federal Law on AML 

A key amendment to the UAE Federal Law on AML is the reformulation of both the National Committee, which now operates under the Cabinet, and the re-named Supreme Committee, which operates under the authority of the Presidential Court (formerly, this was called the Higher Committee and was only temporarily established to oversee the previous national strategy on AML and CTF&PF). [2]

On first glance, this amendment may look merely structural. However, it is indicative of the UAE’s approach to prioritising AML compliance. Elevating the National Committee to fall under the direct purview of the Cabinet and the Supreme Committee to operate under the Presidential Court signifies the intent to centralise oversight and enable faster decision-making. This ensures cohesive leadership and streamlines operations in the fight against financial crimes.

Another key amendment relates to the establishment of a new General Secretariat to the National Committee.[3] While the organisation, structure and working system of the General Secretariat, as well as its financial and administrative regulations, is yet to be decided by the Chairman of the Supreme Committee, it does indicate an increase in the operational capability of the National Committee with dedicated resources to act against money laundering. 

Finally, it is clear from the amendments that virtual asset service providers and non-profit organisations are a growing focus area for ensuring AML compliance.[4]

The National Strategy on AML for 2024-2027 

The new National Strategy for AML and CTF & PF for 2024 – 2027 (the National Strategy) is intended to be a national framework for the UAE to ensure its efforts to combat money laundering are aligned with global standards. In particular, the National Strategy aligns with the latest National Risk Assessment developed using a methodology laid down by the World Bank to mitigate risks of money laundering and terrorist financing. 

The National Strategy sets 11 goals based on three key pillars of risk-based compliance, effectiveness and sustainability.[5] Those goals include:

• enhancing national and international coordination to improve information exchange and partnerships;
• ensuring effective supervision of AML and CTF&PF obligations within the private sector, and strengthening the detection, investigation, and disruption of illicit financial activities;
• optimising human and technical resources, improving data collection and analysis, and continuously updating the legal and regulatory framework to adapt to evolving risks and support transparency and the rule of law; and 
• increasing focus on the risks posed by virtual assets and rapidly advancing forms of cybercrime.

The Supreme Committee is tasked with implementing the National Strategy.[6]

Uptick in enforcement action is expected 

While these regulatory amendments do not alter compliance requirements for companies, they must be seen as changes that further encourage regulators in the UAE to ensure AML compliance. In part, this approach is fuelled by FATF’s upcoming fifth round mutual evaluation process, with the evaluation of the UAE expected to begin in 2026. Regulators in the UAE are focused on showing sustained efforts of AML supervision. We have seen the following recent enforcement activity:

• In August 2024, it was announced that the UAE Central Bank had levied a fine of AED 5.8 million (approximately USD 1.6 million) on a local bank for significant deficiencies in its AML and CTF protocols.[7] Investigations revealed that the bank had failed in implementing measures to detect and prevent money laundering activities. 
• Also in August 2024, it was announced that the Ministry of Economy revoked the licenses of 32 precious metals dealers for multiple AML failures.[8]
• In September 2024, it was announced that a foreign bank operating in the UAE had been fined AED 5 million (approximately USD 1.4 million) for failing to sufficiently address money laundering related deficiencies.[9]

Recent enforcement action reflects the UAE’s ongoing commitment to fortify its regulatory system, enhance its effectiveness and combat financial crimes to maintain the integrity of its economy. Looking ahead, in the run up to FATF’s evaluation of the UAE, businesses in the UAE should expect increased levels of regulator interest through risk assessments, audits and investigations and rigorous expectations around AML and CTF&PF policies and procedures and their implementation.  

Kim and Shagun would like to thank Rawan Bahamran, Legal Advisor in our Riyadh office, for her support.

[1] Federal Decree Federal Decree Law No. (7) of 2024 on Anti-Money Laundering, Combating the Financing of Terrorism and Financing of Illegal Organisations (2024 Amendment to the Federal Law.). See UAE Legislation | Amendments to the legislation. 

[2] Arts. 11, 12(1), 2024 Amendment to the Federal Law.

[3] Article 12(2), 2024 Amendment to the Federal Law.

[4] Article 11(3), 2024 Amendment to the Federal Law. 

[5] No formal document has been released by the UAE government on the National Strategy yet. Information is collected from official news reporting on the National Strategy. See United Arab Emirates Unveils National Strategy for Anti-Money Laundering, Countering the Financing of Terrorism and Proliferation Financing for 2024-27 (mofa.gov.ae) 

[6] Art. 12(6), 2024 Amendment to the Federal Law.

[7] Muzoriwa, K. (2024, August 4). UAE central bank fines local bank dhs5.8m for AML lapses. Gulf Business, available at UAE central bank fines local bank Dhs5.8m for AML lapses (gulfbusiness.com).

[8] Amir, K. A. (2024, August 8). UAE suspends 32 gold refineries in money-laundering crackdown. Markets – Gulf News, available at UAE suspends 32 gold refineries in money-laundering crackdown | Markets – Gulf News.

[9] See UAE central bank fines bank Dhs5m for AML/CFT breaches (gulfbusiness.com).