The financial and legal professions in the UAE play a pivotal role in combating money laundering (ML) and terrorism financing (TF). Accountants, lawyers, and other Designated Non-Financial Businesses and Professions (DNFBPs) are bound by strict Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) frameworks under UAE law to mitigate financial crime risk.
Also check: AML Compliance Services
This article covers the current AML/CTF legal framework, common compliance challenges, practical solutions for accountants and legal professionals, and a worked example of identifying and reporting a red flag.
Understanding AML/CTF in the UAE
Key Legislation
UAE AML/CTF obligations are currently governed by:
- Federal Decree-Law No. 10 of 2025 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations, effective 14 October 2025.
- Cabinet Resolution No. 134 of 2025, the implementing regulation supporting Federal Decree-Law No. 10 of 2025, effective 14 December 2025.
These replaced the earlier Federal Decree-Law No. 20 of 2018 and its 2021 amendment, which many older compliance materials still reference. The current law outlines the duties and responsibilities of DNFBPs, which include accounting and legal firms, and extends personal liability to Money Laundering Reporting Officers, an individual accountability layer beyond institutional penalties alone.
Regulatory Authorities
Several bodies oversee AML/CTF compliance in the UAE, including:
- Central Bank of the UAE (CBUAE)
- Dubai Financial Services Authority (DFSA)
- Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM)
These regulatory bodies issue guidelines and circulars to help businesses stay compliant with current AML/CTF regulations.
Must check: Ultimate Beneficial Ownership (UBO) Declaration
Common AML/CTF Challenges
- Ultimate beneficial owner identification. Identifying the actual owner of a legal entity or trust can be genuinely complicated, particularly with complex corporate structures or nominee arrangements.
- Screening for politically exposed persons (PEPs). PEPs hold prominent public positions and carry heightened corruption risk; identifying and screening them properly can be time-consuming.
- Identifying suspicious transactions. Recognizing patterns of unusual activity within complex financial transactions can be genuinely difficult without the right tools.
- Keeping pace with regulatory change. AML/CTF regulations evolve, and staying current with the latest updates takes ongoing effort.
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AML/CTF Solutions for Accountants
Risk Assessment and Management
Accountants play a significant role in AML/CTF compliance through thorough risk assessment, including:
- Customer Due Diligence. Verifying customer identity and understanding their business to confirm they aren’t involved in illegal activity.
- Enhanced Due Diligence (EDD). Applying deeper scrutiny to high-risk clients and transactions, including more extensive background screening and ongoing monitoring.
Transaction Monitoring
Regular monitoring of transactions helps identify suspicious activity. Accountants tracking and analyzing financial transactions should use appropriately sophisticated tools to confirm they’re genuinely following AML regulations, not just documenting a process on paper.
Reporting Obligations
By law, suspicious activity must be reported to the Financial Intelligence Unit (FIU) through Suspicious Transaction Reports (STRs) or Suspicious Activity Reports (SARs).
Training and Awareness
Accountants need ongoing training to stay current with AML/CTF legislative changes and relevant best practices, with workshops and seminars genuinely helpful for keeping knowledge and skills up to date.
AML/CTF Solutions for Legal Professionals
Client Due Diligence
All lawyers must conduct due diligence on clients to prevent money laundering and terrorism financing, including:
- Know Your Customer (KYC). Verifying client identity and understanding their business activities.
- Ongoing Monitoring. Continuously reviewing client activity to identify potentially suspicious behavior.
Compliance Programs
Legal firms should maintain rigorous compliance programs, including documented internal policies and procedures for AML/CTF compliance, and regular internal audits confirming ongoing adherence to those procedures.
Reporting and Record-Keeping
Legal professionals must maintain significant records concerning clients and transactions, and report suspicious activity to the competent authorities.
Training and Education
Legal practitioners need regular education on the latest AML/CTF legislative developments, with training programs helping them genuinely understand what’s expected of them regarding their duties.
Worked Example: Identifying and Reporting a Red Flag
An accountant preparing financial statements for a client notices the client’s declared income doesn’t reasonably support the volume of cash deposits appearing in their bank records over the past quarter, and the client provides vague, inconsistent explanations when asked directly about the source of these funds. Applying Enhanced Due Diligence given this inconsistency, the accountant reviews supporting documentation the client can provide and finds it insufficient to explain the discrepancy. Rather than simply completing the financial statements and moving on, the accountant documents the specific inconsistency, the client’s response, and the insufficient supporting evidence, then files a Suspicious Transaction Report with the FIU. This is exactly the kind of pattern-based judgment, not a single obvious red flag but an unexplained gap between declared income and actual activity, that AML training is meant to prepare professionals to catch.
Common Challenges
- Complex business structures. Structures used to obscure the source of funds can be genuinely difficult to unpack.
- Irregular transactions. Unusual activity is hard to detect without appropriate monitoring tools in place.
- Evolving regulations. Staying current with regulatory change takes continuous effort and resources.
Best Practices
- Use advanced technology. Implement software tools for transaction monitoring and risk assessment.
- Provide ongoing training. Keep staff genuinely current with AML/CTF regulatory developments.
- Cooperate fully with authorities. Full cooperation with regulatory bodies supports both compliance and access to further guidance.
Frequently Asked Questions (FAQs)
What law currently governs AML/CTF compliance for accountants and lawyers in the UAE?
Are accountants and lawyers considered DNFBPs under UAE AML law?
What is the difference between standard due diligence and Enhanced Due Diligence?
Where should suspicious activity be reported?
Are individuals personally liable for AML compliance failures under current UAE law?
Why is identifying a single suspicious factor sometimes not enough to warrant a report?
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
How Farahat & Co. Can Help
Farahat & Co., a trusted Audit & Accounting Firm, supports accountants and legal professionals with AML/CTF risk assessments, transaction monitoring guidance, compliance training, and Enhanced Due Diligence support.
Contact Farahat & Co. today to discuss your AML/CTF compliance requirements.
