AML Requirements Under Federal Decree-Law No. 26 of 2021

Introduction

In its continued fight against money laundering (ML) and terrorism financing (TF), the UAE introduced Federal Decree-Law No. 26 of 2021, amending provisions of Federal Decree-Law No. 20 of 2018 on AML/CTF.

This amendment strengthens the UAE’s regulatory framework, gives greater powers to supervisory authorities, and expands the compliance obligations of businesses, especially Designated Non-Financial Businesses and Professions (DNFBPs). The law also demonstrates the UAE’s commitment to aligning with Financial Action Task Force (FATF) standards and maintaining its global reputation as a safe and transparent financial hub.

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Key Objectives of the 2021 Amendment

• Enhance the effectiveness of the UAE’s AML/CTF framework.

• Clarify obligations for both financial institutions (FIs) and DNFBPs.

• Strengthen the role of supervisory authorities in monitoring compliance.

• Expand the scope of penalties and sanctions for violators.

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AML Requirements Under Federal Decree-Law No. 26 of 2021

1. Strengthened Supervisory Powers

• Supervisory authorities such as the Central Bank of the UAE (CBUAE), Ministry of Economy (MoE), Securities and Commodities Authority (SCA), and free zone regulators (DFSA in DIFC, FSRA in ADGM) gained wider powers to inspect, monitor, and enforce AML compliance.

• Regulators can now issue directives, conduct investigations, and impose administrative penalties directly.

2. Customer Due Diligence (CDD) & Beneficial Ownership

• Reinforced obligations to conduct CDD and Know Your Customer (KYC) checks.

• Businesses must verify Ultimate Beneficial Owners (UBOs) and maintain accurate ownership records.

• Enhanced Due Diligence (EDD) is required for high-risk clients, including politically exposed persons (PEPs).

3. Suspicious Transaction Reporting (STRs) & Cash Transaction Reporting (CTRs)

• Businesses must report suspicious transactions (STRs) and cash transactions over AED 55,000 (CTRs) through the goAML platform.

• STR obligations apply to both financial and non-financial sectors.

4. Risk-Based Approach (RBA)

• Entities must adopt a risk-based compliance framework tailored to their business activities, customers, and geographical exposure.

• Risk assessments must be documented and regularly updated.

5. Record-Keeping Requirements

• Firms must keep records of transactions, customer data, and due diligence documents for at least five years.

• These records must be readily accessible for inspections.

6. Appointment of Compliance Officers / MLROs

• Mandatory appointment of Money Laundering Reporting Officers (MLROs) or compliance officers.

• MLROs are responsible for monitoring compliance, filing STRs, and liaising with regulators.

7. Employee Training & Awareness

• Regular AML/CTF training programs for employees are mandatory.

• Training must include updates on regulatory changes, red flags, and reporting procedures.

8. Expanded Penalties for Non-Compliance

• Administrative fines ranging from AED 50,000 to AED 5 million.

• Additional penalties may include business license suspension, blacklisting, or imprisonment in severe cases.

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Impact on UAE Businesses

• Greater Compliance Burden: Both financial institutions and DNFBPs must strengthen their AML frameworks.

• Operational Readiness: Businesses need proper systems for CDD, STR filing, and risk assessments.

• Reputational Protection: Compliance ensures credibility with regulators, investors, and international partners.

• Cost of Non-Compliance: Beyond financial penalties, violations can lead to reputational damage and loss of business opportunities.

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Conclusion

Federal Decree-Law No. 26 of 2021 marked a major step in strengthening the UAE’s AML framework. By expanding supervisory powers, clarifying business obligations, and enforcing stricter penalties, the law ensures that the UAE remains at the forefront of global AML/CTF efforts.

For businesses, compliance is not optional—it is a legal, reputational, and strategic necessity.

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About Sheikh Anwar Accounting and Auditing LLC

At Sheikh Anwar Accounting and Auditing LLC, we help businesses comply with Federal Decree-Law No. 26 of 2021 and broader AML obligations. Our services include:

• AML risk assessments and policy drafting.

• goAML registration and reporting support.

• UBO compliance and documentation.

• Outsourced MLRO and compliance officer services.

• Tailored staff training and AML awareness programs.

• 📍 Head Office: Dubai, UAE

• 🌐 Website: www.sa-auditors.com

• 📧 Email: info@sa-auditors.com