UAE Central Bank Imposes Record AED 200 Million Sanction Amid Sweeping AML/CFT Crackdown

In a landmark enforcement move, the Central Bank of the UAE (CBUAE) has levied a record-breaking AED 200 million (approximately USD 54.4 million) fine on a major exchange house after uncovering “significant failures” in its anti-money laundering and counter-terrorism financing (AML/CFT) systems. The unprecedented penalty, imposed under the powers granted by Article 137 of Federal Decree-Law No. 14 of 2018 Regarding the Central Bank and Organization of Financial Institutions and Activities, reflects a zero-tolerance stance toward compliance breaches within the country’s financial sector. In tandem with the institutional fine, the regulator also sanctioned the responsible branch manager with a personal penalty of AED 500,000 (circa USD 136,000) and permanently barred him from holding future positions within any UAE-licensed financial institution.

This dual-pronged enforcement action, targeting both the institution and an individual, marks a significant escalation in regulatory rigor. The CBUAE emphasized its commitment to holding all levels of financial management accountable, highlighting how the failings identified during the inspection process placed the UAE financial ecosystem at considerable risk. The regulatory examination found widespread deficiencies in customer due diligence procedures, transaction monitoring systems, and protocols for identifying and reporting suspicious activities. According to the Central Bank, these gaps not only compromised internal controls but also jeopardized the UAE’s international reputation for financial transparency and integrity.

The UAE’s AML/CFT framework has evolved considerably since its first legislative attempt in 2002, undergoing a series of enhancements to align with global best practices. The current legal infrastructure rests on two pivotal statutes enacted in 2018: Federal Decree-Law No. 14 of 2018, which provides the Central Bank with supervisory authority, and Federal Decree-Law No. 20 of 2018, which outlines detailed AML/CFT obligations for financial and non-financial sectors alike. These laws enabled the UAE to implement measures aligned with the Financial Action Task Force (FATF) Recommendations, ultimately facilitating the country’s removal from the FATF “grey list” in February 2024. The legislation also consolidated enforcement mechanisms, equipping regulators with tools that range from administrative penalties to criminal referrals.

Significant amendments introduced in August 2024 expanded the AML/CFT supervisory perimeter to cover virtual asset service providers, non-profit organizations, and other emerging high-risk sectors. Furthermore, institutional oversight was enhanced with the elevation of the National Committee for AML/CFT to a Cabinet-level body, alongside the establishment of a Supreme Committee under the Presidential Court designed to accelerate strategic policymaking.

Building on this regulatory momentum, the UAE Cabinet launched the 2024–27 National Strategy for AML/CFT and Proliferation Financing on September 2, 2024. Developed with support from the World Bank Group and informed by the UAE’s National Risk Assessment, the strategy outlines eleven strategic goals structured around three central pillars: risk-based supervision, operational effectiveness, and long-term sustainability. The objectives include strengthening the exchange of intelligence between domestic and international Financial Intelligence Units (FIUs), enhancing private-sector compliance through rigorous enforcement, and upgrading monitoring systems using AI and advanced data analytics. The strategy also aims to increase regulatory coverage, invest in training for compliance professionals, align national laws with global standards, and institutionalize performance metrics to measure AML/CFT effectiveness.

Crucially, the strategy calls for deeper public-private partnerships, improved regional coordination, and heightened public awareness of the social and economic costs of financial crime. His Highness Sheikh Abdullah bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Foreign Affairs, stated: “The UAE’s proactive approach not only safeguards the integrity of the global financial system but also strengthens our position as a leading international financial center and trade hub.”

In the wake of the country’s FATF delisting, the UAE has demonstrated unwavering commitment to enforcement, with the CBUAE significantly stepping up its oversight. Key enforcement actions over the past twelve months include a AED 5.8 million fine against a national bank in August 2024 for deficient AML/CFT frameworks and the revocation of 32 licenses from precious-metals dealers by the Ministry of Economy during the same period. The current AED 200 million sanction issued in May 2025 represents the most severe to date, signaling a new era of accountability and precision in financial regulation.

Data from 2023 reveals that the Central Bank conducted 181 on-site examinations across various financial entities, issuing more than AED 113 million in fines. Meanwhile, the UAE’s Financial Intelligence Unit processed over 8,300 intelligence requests from both domestic and international bodies during the 2022–2023 period and entered into 68 memoranda of understanding with global FIUs to bolster cross-border cooperation.

In response to the shifting regulatory environment, financial institutions are being compelled to adopt more dynamic, risk-sensitive compliance programs. Institutions are expected to conduct ongoing risk assessments tailored to customer profiles, geographies, and product offerings, and to integrate AI-powered tools capable of detecting sophisticated money laundering typologies. Boards are also under growing pressure to embed AML/CFT oversight at the executive level, ensuring periodic reviews and strategic alignment. Additionally, compliance officers must undergo continuous professional development to stay abreast of risks associated with virtual assets, charitable organizations, and high-risk jurisdictions. Enhanced due diligence, particularly in correspondent banking relationships, is now mandated, along with robust exit strategies for non-cooperative entities.

These developments are driving a surge in investment in both technology and human capital across the financial sector. Mohamed Daoud, Industry Practice Lead at Moody’s Analytics, observed: “The removal of the UAE from the grey list will boost trust in its financial system and would lead to smoother foreign currency transactions, lower inter-bank fees and increased trade and investment.”

Looking forward, the UAE’s AML/CFT regime is poised for further innovation. Future plans include leveraging blockchain analytics to track illicit flows, expanding AI-driven anomaly detection across all payment systems, and enacting ongoing legislative updates aligned with FATF, Basel Committee, and European Banking Authority guidelines. The strategy also calls for the creation of dedicated AML/CFT training institutions and international task forces to trace financial crime networks and recover illicit assets. Moreover, authorities plan to increase transparency through detailed publication of enforcement statistics, typology reports, and sectoral compliance scorecards.

With these efforts, the UAE aims not only to deter money laundering and terrorism financing but also to become a global benchmark for AML/CFT excellence. As the country prepares for its fifth-round FATF mutual evaluation in 2026, its commitment to robust supervision, technological advancement, and international cooperation remains resolute. The AED 200 million penalty and accompanying personal sanction are a clear testament: AML/CFT compliance is not optional, and the UAE is ready to lead by example.

By fLEXI tEAM