DFSA updates rulebooks in anti-money laundering push

The changes, which took effect on 2 March, are intended to align the DFSA’s AML rulebook with Federal Decree-Law No. (10) of 2025 and Cabinet Resolution No. (134) of 2025 (the Federal AML Laws), which significantly overhauled the UAE’s AML, counter-terrorist financing (CTF) and counter-proliferation financing (CPF) framework.

The DFSA has also published updated frequently asked questions (FAQs) (9-page / 524KB PDF) to help firms interpret and implement the updated rules, particularly in areas where compliance challenges commonly arise, such as governance, risk assessments, onboarding, outsourcing, and internal audit.

The Federal AML Laws, which entered into force in October and December 2025, established new AML, CTF and CPF standards and seek to strengthen enforcement in these areas through a series of measures, including creating new obligations related to digital systems, virtual assets and encryption technologies.

Accordingly, the DFSA has updated its rulebooks to “provide clarity” on the new AML regime applicable to DFSA-regulated firms. The updated AML rulebook expands the scope of financial crime risk, in accordance with the Federal AML Laws. Additionally, references to ‘the financing of illegal organisations’ have been removed and replaced with the updated and expanded federal definitions, such as proliferation financing.

The DFSA also places emphasis on the fact that money laundering, terrorist financing and proliferation financing risks are not interchangeable. For example, while certain activities may result in a lower risk of money laundering, it does not necessarily follow that such activities will result in a lower risk of terrorist financing and proliferation financing.

Firms are reminded to separate money laundering, terrorist financing, and proliferation financing considerations in their methodologies, rather than rely on unified scoring or generic assumptions that conclude that a lower risk of money laundering automatically corresponds to a lower risk of terrorist financing and/or proliferation financing risk.

The updated AML rulebook also introduces several enhancements to customer due diligence and beneficial ownership requirements, setting out additional requirements that firms must comply with and verify as part of their onboarding processes. The DFSA has also placed a renewed emphasis on a substantive, risk-based approach, and confirmed that a firm’s onboarding processes, including customer acceptance policies, must be an extension of their risk appetite.

Commenting on the updates, Marie Chowdhry, a financial regulation expert at Pinsent Masons, said: “What we are seeing is a clear expectation that AML frameworks must be grounded in a regulated firm’s real risk appetite. Governance, onboarding and customer acceptance processes are no longer standalone exercises; they are expected to operate as a coherent, defensible system.”

By mirroring federal AML reforms, the DFSA also strengthens the interoperability of UAE‑wide AML standards. Chowdhry said these amendments will help foster a seamless regulatory environment that will further reduce uncertainty and compliance fragmentation among DFSA-regulated firms.

The DFSA’s updated AML framework also indicate a move toward more rigorous, evidence-based compliance and greater accountability at the senior management, and compliance officer levels.

In light of these changes, DFSA-regulated entities, senior management and compliance officers will be expected to update their AML policies and procedures, as well as review and, where necessary, enhance customer onboarding requirements, she said.