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The UAE has fundamentally reshaped its compliance risk landscape with the issuance of Federal Decree Law No. 10 of 2025, which comes into effect in October 2025 and replaces the previous 2018 AML framework. The new law significantly expands anti money laundering, counter terrorist financing, and counter proliferation financing obligations, with one critical shift that businesses cannot ignore: tax evasion, whether domestic or foreign, is now expressly treated as a predicate offence for money laundering, triggering serious legal, financial, and operational consequences.
Why the new AML law is a turning point for businesses
Under the 2025 law, tax evasion is no longer viewed as a separate compliance issue limited to tax authorities. Direct and indirect tax evasion can now activate AML investigations, even where no tax evasion conviction exists. Authorities may rely on objective circumstances to assess whether a person knew or should have known that funds were derived from unlawful activity. This lowers the evidentiary threshold and significantly increases exposure for businesses with aggressive tax positions, undeclared income, or poorly documented structures.
Tax evasion as a money laundering trigger
The inclusion of tax evasion as a predicate offence means that suspicious tax behaviour can now lead to asset freezes, transaction suspensions, and criminal proceedings under AML legislation. Investigations may be initiated based on circumstantial indicators rather than final tax assessments, creating immediate risk for entities that lack robust accounting records, clear income sourcing, or transparent ownership and control documentation.
Expanded powers for regulators and enforcement bodies
The law grants enhanced powers to the Financial Intelligence Unit and other competent authorities. These include the ability to freeze assets for up to 30 days, with extensions available, and to suspend suspicious transactions for up to 10 days without prior notice. New supervisory and strategic oversight bodies are also introduced, reinforcing a coordinated national approach to financial crime prevention.
Severe penalties and personal accountability
Penalties under the 2025 AML law are significantly harsher. Individuals may face imprisonment of up to 10 years and fines ranging from AED 10 million to AED 100 million, or the value of the property involved, whichever is higher. Businesses face corporate criminal liability, and directors, managers, and board members may be held personally accountable where failures in oversight, controls, or compliance frameworks are identified.
Who is most exposed to the new risks
The impact is particularly acute for sectors already subject to heightened scrutiny, including accounting and tax advisory firms, company formation providers, designated non financial businesses and professions, virtual asset service providers, and businesses using complex cross border or offshore arrangements. Virtual asset activities are expressly within scope, requiring careful reassessment of AML controls, customer due diligence, and beneficial ownership transparency.
What businesses should be doing now
Preparation is critical. Businesses should review their tax positions for defensibility, ensure accounting records fully support reported income, and strengthen AML risk assessments. Customer due diligence and beneficial ownership records must be accurate, current, and verifiable. Internal policies should clearly address tax risk as part of financial crime prevention, not as a separate silo.
Why clean accounting and tax compliance matter more than ever
The 2025 AML framework reflects a global shift driven by FATF standards and upcoming international evaluations. In this environment, weak bookkeeping, informal practices, or undocumented tax decisions create risks that extend far beyond penalties or assessments. They now expose businesses to criminal investigations, asset disruption, and reputational damage.
How Danix Consultancy supports AML and tax aligned compliance
Danix Consultancy helps SMEs and growing businesses align their accounting, tax compliance, and governance frameworks with the UAE’s evolving AML and financial crime requirements. We support clients in strengthening bookkeeping accuracy, reviewing tax positions, improving ownership transparency, and embedding practical compliance controls that reduce risk and support sustainable growth.
If your business operates in a regulated or cross border environment, Danix Consultancy can help you assess your exposure under the 2025 AML law and put the right accounting and compliance foundations in place before enforcement intensifies.
