UAE Imposes Dh1.15 Million Fine on Companies for Violating AML and CTF Laws

The Securities and Commodities Authority (SCA) has taken firm action against companies for breaching UAE anti-money laundering and counter-terrorism financing rules. Since January 2025, the SCA has imposed fines totaling Dh1.15 million on companies found in default of these regulations, a clear signal that enforcement in this area is active and ongoing, not a once-off compliance sweep.

This guide covers the current UAE AML/CFT legal framework, the breakdown of the SCA’s recent enforcement actions, the consequences of non-compliance, and a practical compliance self-check for businesses looking to avoid similar penalties.

UAE’s Current AML and CTF Legal Framework

UAE AML/CFT obligations are currently governed by Federal Decree-Law No. 10 of 2025, effective 14 October 2025, with its implementing regulation set out in Cabinet Resolution No. 134 of 2025, effective 14 December 2025. These replaced the earlier Federal Decree-Law No. 20 of 2018 and Cabinet Decision No. 10 of 2019, which governed AML/CFT at the time enforcement actions like this one were first reported. The current framework also extends personal liability for Money Laundering Reporting Officers, making AML compliance a direct individual responsibility, not solely an institutional one.

These laws require businesses to carry out due diligence, maintain transaction records, and report suspicious activity, and are enforced by the Ministry of Economy, the UAE Central Bank, and the Financial Intelligence Unit (FIU).

Also check: AML Compliance Services

Companies Penalized for AML and CTF Violations

Dh1.15 Million in Fines

The SCA fined companies found guilty of violating anti-money laundering and counter-terrorism financing rules a combined Dh1.15 million. Reported violations included failing to report suspicious transactions, and poor due diligence and record-keeping practices.

Breakdown of the Fines

Since January 2025, the SCA’s Dh1.15 million in fines has included AED 650,000 from companies and investors for violating market rules, and AED 500,000 from other companies for non-compliance with AML/CFT provisions and for engaging in activities outside the scope of their license.

SCA’s Commitment to Market Integrity

The SCA continues applying strict measures and clear regulatory guidance to strengthen investor protection and reinforce the UAE’s position as a leading global financial center.

Must check: Ultimate Beneficial Ownership (UBO) Declaration

Consequences of AML Non-Compliance in the UAE

• Heavy fines. Penalties range from thousands to millions of dirhams depending on the severity of the violation.
• Business constraints. Restrictions can be placed on a company’s ability to carry out licensed activities, including banking-related services.
• Suspension or cancellation of license. Repeated or severe violations can lead to full license cancellation.
• Criminal consequences. Imprisonment, travel restrictions, and asset freezing can apply to individuals directly involved in money laundering or terrorism financing activity.
• Personal liability for MLROs. Under the current AML framework, Money Laundering Reporting Officers face extended personal liability, meaning individual accountability, not just institutional penalty, is now a real exposure.

How to Avoid Similar Penalties: A Compliance Self-Check

Before assuming a compliance program is adequate, businesses should honestly assess a few core questions:

• Is the AML policy actually current? A policy referencing the superseded FDL 20/2018 framework rather than FDL 10/2025 and Cabinet Resolution 134/2025 is itself a compliance gap.
• Is suspicious activity reporting genuinely happening, not just documented as a process? A written procedure that isn’t actually followed in practice offers no real protection.
• Are business activities staying within licensed scope? One of the SCA’s own cited violation categories was activity outside the company’s licensed scope, a check worth running regularly, not just at license renewal.
• Does the MLRO understand their personal liability exposure? Given the extended personal liability under the current framework, this isn’t a role that can be filled nominally.
• Are records retained for the required period? UAE AML requirements generally call for a minimum of five years of transaction record retention.

How to Ensure AML Compliance in the UAE

1. Formulate a Strong AML Policy

Robust internal AML policies should include risk assessment, customer due diligence (CDD) and, where necessary, enhanced due diligence (EDD), and clear reporting procedures for suspicious transactions.

2. Train Employees on AML Compliance

Regular training helps employees understand their responsibilities, including how to identify and report suspicious activity.

3. Keep Accurate Records

Financial transaction records should be retained for a minimum of five years, supporting any future audit or regulatory investigation.

4. Use AML Compliance Software

AML compliance software can help identify suspicious activity and automate reporting, reducing exposure to risk. Many UAE companies now use AI-powered tools to support this.

5. Conduct Regular AML Audits

Scheduled internal and external audits, ideally involving financial experts, help identify compliance gaps and recommend improvements before a regulator finds them first.

6. Report Suspicious Activity

Suspicious financial transactions should be reported to the UAE’s Financial Intelligence Unit through the official goAML portal.

Frequently Asked Questions (FAQs)

How Farahat & Co. Can Help

Farahat & Co. provides AML risk assessment, policy development, staff training, and compliance audit services to help UAE businesses stay aligned with current AML/CFT requirements.

Contact Farahat & Co. today to discuss your AML compliance requirements.