Financial crime is in sharp focus as the UAE gears up for its 2026 FATF review. High profile appointments at regulators and tighter oversight of high-risk industries mark a clear shift in enforcement priorities.
Key takeaways
- Regulatory reforms and the UAE’s AML/CTF strategy signal a push to combat financial crime and stay off the FATF grey list
- The UAE is ramping up AML and financial crime enforcement with fines and stricter oversight of high-risk sectors like crypto and fintech
- The UAE is poised for a robust regulatory stance in 2026, with a sharp eye on the on the next FATF evaluation
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The United Arab Emirates (UAE) walks a careful tightrope – striving to maintain its status as a global business hub while strengthening its defences against financial crime. Despite significant progress in recent years, the country is still vulnerable to financial crime, making robust enforcement efforts essential to protecting its reputation as a global financial centre.
The UAE's commitment to combating financial crime has gained international recognition. The UAE was removed from the Financial Action Task Force (FATF) “grey list” in February 2024, ending a two-year stint on the financial crime watchdog’s list of jurisdictions under scrutiny for deficient money laundering and counter terrorist financing (CTF) controls. Building on this success, the European Union dropped the UAE from its own list of high-risk countries in June 2025.
Recent months have seen the UAE step up its regulatory efforts with renewed vigor. A flurry of recent fines and harsher scrutiny of high-risk sectors demonstrate the country’s commitment to protecting its hard-won status as a global financial centre. This enhanced enforcement landscape was reinforced by the appointment of Mark Steward as the new chief executive of the Dubai Financial Services Authority (DFSA) in May 2025. Steward, the former head of enforcement at the UK Financial Conduct Authority (FCA), brings significant experience in financial crime enforcement to his new role.
Lexology PRO explores the UAE’s ongoing efforts to strengthen its defences against financial crime, highlighting recent enforcement actions and the outlook for 2026.
A hotspot for illicit financial flows
Anti-corruption organisations criticised the UAE’s removal from the FATF grey list, citing the country’s history of lax financial crime regulations and ongoing exposure to corruption.
The UAE has been accused serving as a destination for money laundering and facilitating the flow of “dirty money.” Transparency International identified the UAE as a key intermediary jurisdiction for enabling cross-border corruption in December 2023.
Several factors contribute to the UAE's risk profile. The country is home to many politically exposed or high-risk individuals, including sanctioned political elites and other criminals. On top of these concerns, the UAE’s golden visa programme – which grants residency to wealthy foreigners in exchange for cash – has faced widespread scrutiny for potentially enabling corruption and providing avenues for illicit financial flows.
A push to tackle financial crime
Despite concerns around the UAE’s exposure to financial crime risks, the country is stepping up efforts to drive enforcement and combat illicit activity.
“There is a clear shift from procedural, box-ticking compliance to a more outcomes-driven approach, with regulators increasingly scrutinising whether firms have embedded a genuine culture of AML risk awareness and accountability,” according to Damian Wright, Dubai-based senior associate at UK outfit Clyde & Co.
Recent regulatory actions
- The UAE Central Bank imposed financial penalties totalling 12.3 million dirham (US$3.3 million) on six unnamed exchange houses – a term for financial service providers that facilitate currency exchanges or digital payments – on 10 June 2025 for breaching anti-money laundering (AML) regulations under Federal Decree Law No. (20) 2018 – the UAE’s governing AML law;
- The Ministry of Economy and the Dubai police signed a pact on 9 June 2025, joining forces to step up the fight against financial crime; and
- The UAE Central Bank levied a 200 million dirham (US$54.5 million) fine on 20 May 2025 against an unnamed currency exchange for AML deficiencies and non-compliance with Federal Decree Law No. (20) 2018.
A strong regulatory reputation will enhance the UAE’s appeal to foreign investors and global financial institutions. The UAE’s recent enforcements and the arrival of former FCA head as the DFSA’s newest chief executive may support this. Steward oversaw an uptick in investigations during his FCA tenure and experts are confident that he will have a similar impact at the DFSA.
“[Steward’s] track record would suggest that we can expect to see the DFSA continue with its detailed and robust approach to supervision and enforcement with the potential for increased intervention and activity,” Rebecca Copley, partner and head of litigation for the Middle East at Eversheds Sutherland, told Lexology PRO.
To stay clear of the grey list, UAE regulators are tightening oversight of certain high-risk industries, including crypto, real estate, and fintech.
The Securities and Commodities Authority (SCA) and the Virtual Asset Authority have implemented unified AML standards for virtual asset service providers, mandating robust know-your-customer practices and cross border transaction monitoring, among other requirements. The DFSA has also ramped up surprise inspections on crypto companies in 2025 to ensure compliance with the country’s AML regulations.
Regulatory changes reflect reform
Amendments to the UAE’s regulatory landscape suggest a strong push on financial crime reform.
It updated its existing AML laws in November 2024 to grant greater authority to key AML institutions. Among the changes, the National Committee Anti Money Laundering and Combatting the Financing of Terrorism and Financing of Illegal Organisations is now formally established by the UAE Cabinet, rather than by ministerial decision.
The changes align with, and form part of, the UAE’s 2024-2027 National AML/CFT Strategy. This strategy seeks to enhance cooperation with international partners and strengthen oversight of financial institutions, among other goals. The strategy flagged virtual assets as a key risk area for the UAE in the coming years.
Changes to how the UAE regulates and enforces financial crime “reflects the country's clear commitment to reducing its attractiveness to criminals by demonstrating the seriousness with which it tackles money laundering,” explains Eversheds Sutherland partner Steve Smith.
The UAE’s regulatory revamp extends beyond financial crime and aims to clean up risky industries and improve corporate governance. For example, Dubai introduced a new law to protect financial whistleblowers in May 2025. In the same month, the UAE enacted new licensing rules for finfluencers offering financial advice on social media, aligning with a global crackdown by regulators against finfluencers promoting risky online investments.
The outlook for 2026
The UAE’s next FATF evaluation is scheduled to take place in 2026. To maintain its current standing, the UAE will prioritise financial crime enforcement, "both in the lead up to and following the next FATF evaluation, as the UAE’s AML regime continues to mature. We can also expect to see more enforcement in the areas of the protection of whistleblower rights and digital assets, a sector in which the UAE remains a global leader, both in terms of business activity and regulation," David Berman, Dubai-based local partner at White & Case told Lexology PRO.
While the UAE ramps up its requirements for companies to align with broader regulatory reforms, compliance challenges persist.
“The most common gaps arise from inadequate risk assessments, weak UBO [ultimate beneficial ownership] transparency, and a failure to escalate red flags through appropriate internal channels. Many firms invest in policy documentation but fall short on effective implementation,” Damian Wright, Dubai-based senior associate at UK firm Clyde & Co told Lexology PRO.
The enforcement outlook for 2026 remains robust, with authorities aiming to close compliance gaps and build on the momentum of the UAE’s removal from the FATF grey list.