UAE's New AML Law Reshapes Commercial Dispute Risk for Businesses and Litigators
The UAE's Federal Decree-Law No. 10 of 2025 lowers the threshold for money laundering liability and transforms how commercial disputes are litigated. Corporations and executives now face expanded exposure.
AML Now a Central Factor in UAE Commercial Litigation
The UAE's new anti-money laundering law has moved financial crime compliance from the margins of commercial disputes to the centre, cdr-news.com reports, citing analysis by Rima Mrad and Zina Bensaid of BSA Law.
Federal Decree-Law No. 10 of 2025 on Combating Money Laundering, the Financing of Terrorism and the Financing of Arms Proliferation — together with its implementing Executive Regulation — represents a structural recalibration of the UAE's financial crime framework. The changes affect liability thresholds, enforcement architecture and governance expectations across the economy.
'Should Have Known' Standard Raises the Stakes
One of the most consequential shifts introduced by the new law is the effective lowering of the mental element required to establish principal offences. Knowledge of illicit intent may now be inferred from objective circumstances, introducing what amounts to a "should have known" standard in certain contexts.
For businesses, the practical effect is significant. Transactions previously defended as commercially negligent, poorly structured or insufficiently documented may now attract allegations of facilitating money laundering or proliferation financing due to inadequate systems and controls. In civil proceedings, this recalibration alters both leverage and exposure for all parties.
In the post-FATF grey list environment, UAE courts are demonstrably more conscious that AML compliance is a national priority tied to the country's international standing. That awareness now informs judicial reasoning in ways commercial parties must anticipate.
AML Arguments Entering Contractual and Insolvency Disputes
Mrad and Bensaid report that AML considerations are already being deployed across a range of commercial proceedings. These include illegality and public policy defences to contractual enforcement, challenges to the enforceability of settlement agreements, applications for freezing orders based on alleged dissipation risk, derivative claims against directors for governance failures, and disputes arising from trade finance and structured import/export arrangements.
In sectors now expressly within scope — including trade, logistics, manufacturing of dual-use goods, professional services and virtual assets — AML exposure may be determinative rather than incidental. A dispute over non-performance of a supply contract can quickly become an inquiry into whether enhanced due diligence was conducted, whether beneficial ownership was adequately verified and whether red flags were escalated.
Designated Non-Financial Businesses and Professions (DNFBPs) — law firms, corporate service providers, real estate brokers and auditors — face reinforced obligations under the new law. Their internal compliance records may now become evidentially relevant in contentious proceedings.
No Limitation Period and Expanded FIU Powers
Two structural features of the law carry particular weight for litigation strategy.
First, there is no limitation period for financial crime offences. Historical transactions, sometimes dating back years, may be re-examined in light of new intelligence or regulatory inquiry. Shareholder disputes, insolvency claims and post-completion M&A litigation may therefore intersect with AML scrutiny long after the underlying transaction has closed.
Second, the Financial Intelligence Unit (FIU) now operates as an independent statutory authority with enhanced powers. It may suspend transactions for up to 10 working days and freeze assets for up to 30 days without prior notice. These powers can and do interrupt contractual performance, affecting interim relief, settlement and enforcement strategies.
Courts are also increasingly familiar with money laundering typologies — rapid fund transfers across accounts, cross-border layering, conversion into virtual assets and the use of nominee or opaque ownership structures. Where a claimant can demonstrate that the factual matrix corresponds with such patterns, the court's assessment of dissipation risk may be sharpened. The authors note, however, that assertions premised on AML concerns must be substantiated by clear, credible evidence and advanced in a manner carefully tailored to the scope of relief being pursued.
Directors and Executives Face Personal Exposure
The new law significantly strengthens senior management accountability. Responsibility for AML compliance cannot be fully delegated to compliance officers. "Senior management" is defined broadly to include individuals with executive decision-making authority or operational influence.
From a contentious perspective, this expands the potential battleground. Directors and executives may face derivative actions alleging failure to implement adequate AML systems, claims of breach of fiduciary duty tied to compliance failures, and personal exposure where knowledge is inferred from internal reports. Reputational and regulatory consequences from civil findings represent an additional risk.
Board minutes, escalation records and AML training materials are identified as key categories of evidence in future disputes. The focus, Mrad and Bensaid indicate, will not simply be on whether a formal compliance function existed, but on whether those in senior positions exercised adequate oversight and responded appropriately to red flags.
For corporations operating in the UAE, the message emerging from the new AML framework is unambiguous: compliance records are now litigation records, and the threshold for what constitutes sufficient due diligence has moved.
Source: Google News UAE — Courts & Fraud