Anti-money laundering is one of the key rules for business in the UAE. With the changes in the framework, things have been stronger in the financial sector for global business. All businesses that are directly or indirectly linked to the UAE must follow the new AML regulations.

There is no exception to it. The new rule has expanded the demand for compliance, increased the penalties, and also included both traditional and financial institutions. We would talk through the compliance, KYC, and risk assessment for AML checks.

What Are AML Checks?

Anti-money laundering checks refer to the identification and due diligence procedures of every business. It is done to find issues and prevent money laundering, terrorist financing, and other illegal activities. The key components include:

Proper verification of customer identity, like name, address, official ID, etc
Checking the list against sanction lists, watchlists, and potentially exposed persons
Timely monitoring of transactions for suspicious activity or unusual patterns
Proper maintenance of records of AML checks for timely review.

What is the Role of KYC and Customer Due Diligence ?

What is KYC?

Know Your Customer, or simply KYC refers to the policies and procedures used to know your customer. It is basically used to verify the identity and reduce risks. It includes:

Verification of identity with the use of official documents like a passport, an Emirates ID, a trade license, etc
Verification of address with the use of utility bills, bank statements, lease/rent agreement, or other proof
Receiving the business details for corporate clients, like certificate of incorporation, information about directors and shareholders, nature of business, etc.

Customer Due Diligence (CDD) and Risk-Based Approach

Customer Due Diligence is important for all old and new customers. This rule change has come in the 2025 AML framework.

Depending on the risk associated with a customer — based on factors such as geography, profession, source of funds, transaction size, or being a PEP — businesses must apply a risk-based approach. High-risk customers deserve Enhanced Due Diligence (EDD), which involves deeper scrutiny.

What are Recent Regulatory Changes in UAE / Dubai (2025) ?

The AML regulatory landscape in the UAE has changed in recent times. The most recent legislation, Federal Decree-Law No. 10 of 2025 (which replaced earlier AML frameworks), has strict compliance requirements.

Key changes:

Expanded scope: law now explicitly covers virtual assets and related service providers (VASPs) besides traditional financial institutions.
Financial Intelligence Unit has the power to freeze the assets and suspend transactions for 10 days. It can even be extended by the public prosecutor.
The requirements for identification and maintaining records of ultimate beneficial owners have been made stricter.
The obligations aren’t only for the financial institutions now. It will broadly be used for Designated Non-Financial Businesses and Professions. DNFBPs include real estate brokers, lawyers, accountants, precious metals dealers, etc
If you fail to follow the new compliance, businesses will have to pay heavy fines. The fines could go up to a million dirhams. Not only that the license be revoked, with no future business in Dubai.

Who Must Comply — Institutions Subject to AML / KYC ?

Different entities should follow the new AML/KYC rule. These include:

Banks, insurers, money-exchange houses, fintech & payment service providers.
Virtual Asset Service Providers (VASPs) include the likes of cryptocurrency exchanges, wallet services, and other crypto-related businesses.
DNFBPs (Designated Non-Financial Businesses and Professions): The clients involved in DNFBPs are real estate agents, dealers of precious metals, legal firms, auditing and accounting firms, corporate service providers, etc.

What are the Key Components of Effective AML Compliance ?

Firms should implement a comprehensive AML compliance framework to meet the demands. The key components include:

AML Policy and Procedures: Documented internal policies including KYC/CDD/EDD procedures, record-keeping, transaction monitoring, and reporting protocols.
Registration with goAML (or relevant national AML portal): All regulated entities must register with the FIU/goAML portal for mandatory reporting.
Customer Onboarding & Identity Verification: Collect and verify identity and business information, beneficial ownership, source of funds, expected transaction behaviour, etc.
Risk Assessment & Risk-Based Due Diligence: Classify clients by risk (low/medium/high) and apply appropriate due diligence (standard vs enhanced).
Ongoing Monitoring & Transaction Screening: The ongoing customer activity must be checked along with suspicious patterns. It needs to be cross-checked against sanctions again and the PEP lists
Reporting Suspicious Activity: If any suspicious activity is found, you need to file Suspicious Transaction Reports on goAML.
Record Keeping: Prepare the right documents of identification, transaction history, due diligence, and risk clarification for at least 5 years.
Compliance Governance: Hire a dedicated compliance or Money Laundering Reporting officer. He/she helps to train staffs, look after internal audits and do independent reviews.

Why AML/KYC & Risk Assessment Matter ?

There are major risks that appear when you fail to follow AML/KYC compliance.

Legal and Regulatory Penalties: The fines for such a mistake could go up to AED 100 million. It could also result in license suspension, criminal penalties, etc
Asset Freeze / Business Disruption: The FIU now has the authority to freeze assets or suspend transactions temporarily. It can impact your business operations massively.
Reputational Damage: Lack of compliance will result in poor trust amongst clients, partners, and investors. This impacts business in the long run.
Exposure to Financial Crime: If there is no proper check, the firm could be involved in money laundering, terrorist financing etc. This results to financial loss and legal liability.

What is the Practical Steps for Service Providers in Dubai?

Accounting clients who provide advisory, corporate, or real estate services must use the AML/KYC process correctly. The compliance checklist includes:

The firm needs to register with the national AML portal before starting.
Firms should prepare all the necessary documents falling under the AML/KYC policy. It includes identity verification, beneficial ownership, record keeping etc.
Hire a qualified compliance officer who checks whether rules are being followed at the top level or not.
Collect identity and business documentation, verify UBOs, assess the source of funds, and classify risk for every client
The Enhanced Due Diligence must be implemented for high-risk clients.
There should be timely reviews, automated alerts to check for all the ongoing transactions.
Prepare a proper record for the required retention period for audits and review. It generally is 5 years
File Suspicious Transaction Reports immediately when you find issues
Provide timely staff training so that they understand AML obligations, red flags, etc
Compile audits on a timely basis and find the gaps that are present both internally and externally.

Conclusion

Any business that runs in the UAE must follow the AML checks, KYC, and risk-based due diligence now. It is not optional at all. Under the 2025 AML changes, the laws have widened for different firms, which cover both traditional and non-financial institutions.

With the strong framework, it protects firms from legal issues, financial losses, and reputation damage. The use of better AML/KYC procedures, appointing compliance officers, and doing proper risk assessment allows us to protect the image and financial condition of a company.