Proliferation Financing Is Now a Standalone Offence in the UAE: What Your Compliance Programme Needs to Add
The UAE’s financial crime framework has undergone its most significant overhaul in years. For compliance officers, MLROs, and senior management at financial institutions and DNFBPs, one change in particular demands immediate attention. Article 3 of Federal Decree-Law No. 10 of 2025 introduces proliferation financing as a standalone criminal offence for the first time, making it illegal to finance, without authorisation, arms or weapons of mass destruction. Proliferation financing now sits alongside anti-money laundering and counter-terrorist financing as one of the three principal offences under UAE law. If your compliance programme has not been updated to reflect this, it is no longer fit for purpose. Compliance monitoring software in Dubai built to manage the full AML/CFT/CPF framework is now a baseline requirement, not a competitive advantage.
What Federal Decree-Law No. 10 of 2025 Actually Changed
Federal Decree-Law No. 10 of 2025 on Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing was issued in October 2025 and became effective on 14 October 2025. It repeals and replaces Federal Law No. 20 of 2018, ushering in a stricter and more comprehensive regime.
The key changes compliance teams need to understand are:
- Proliferation financing is now recognised as a standalone criminal offence under Article 3, covering the financing of weapons of mass destruction, dual-use goods, and related technologies.
- The law marks a shift from a reactive, compliance-tick-box regime into a proactive, intelligence-driven ecosystem. It integrates proliferation financing controls so that financing of weapons of mass destruction and related dual-use materials falls squarely within the compliance regime.
- The law also introduces personal liability for managers, lowers the knowledge threshold for offences, and widens the regulatory perimeter to capture virtual asset service providers.
- Criminal proceedings for money laundering, terrorism financing, and proliferation financing can now be initiated at any time, regardless of how many years have passed since the offence occurred. Past violations can be prosecuted indefinitely, creating permanent legal risk.
Who is in Scope
The businesses directly regulated under Federal Decree-Law No. 10 of 2025 are financial institutions, designated non-financial businesses and professions (DNFBPs), virtual asset service providers (VASPs), and some non-profit organisations with cross-border funding risks.
DNFBPs include real estate brokers and agents, lawyers, auditors, accountants, notaries, and dealers in precious metals and stones. Regulators segment oversight by sector: the CBUAE covers banks and finance, the Securities and Commodities Authority covers capital markets, the Insurance Authority covers insurance, the Ministry of Economy covers DNFBPs, and DIFC and ADGM authorities cover their respective free zones.
If your business falls into any of these categories, your compliance obligations under the new law are active, enforced, and carry personal liability for senior management.
What Your Compliance Programme Must Now Include
| Compliance Area | What Is Required |
| Risk assessment | Update your enterprise-wide risk assessment to include a dedicated proliferation financing risk category |
| Policies and procedures | Revise AML/CFT policies to explicitly reference CPF obligations and red flags |
| Sanctions screening | Implement targeted financial sanctions screening specifically for PF-related designations |
| Customer due diligence | Reassess CDD procedures to identify customers and transactions with proliferation financing exposure |
| Transaction monitoring | Update monitoring rules and typologies to flag PF red flags, including dual-use goods transactions |
| Staff training | Train employees on identifying PF-specific suspicious activity and their reporting obligations |
| Record keeping | Document all compliance activities including CDD, monitoring, and reports |
| Beneficial ownership | Tighten beneficial ownership verification, particularly for complex or layered structures |
Industry advisers highlight the need to re-assess risk appetites, enhance screening and transaction monitoring systems, revisit governance arrangements, and ensure that management information and escalation processes reflect the heightened liability environment.
The Penalties and Personal Liability Exposure
The consequences of non-compliance under the new law are significantly more severe than under the 2018 framework.
Businesses must upgrade systems, governance, and internal controls immediately to avoid fines of up to AED 100 million and potential dissolution.
Senior officers can face personal prosecution, asset freezing, travel bans, and imprisonment for failure to comply with AML obligations. The introduction of personal liability is one of the most significant practical shifts in the new law. Compliance is no longer solely a corporate obligation. It is a personal one for every director and senior manager at a regulated entity.
Why Compliance Monitoring Software in Dubai Is Now a Necessity
The expanded scope of Federal Decree-Law No. 10 of 2025 places demands on compliance programmes that manual processes simply cannot meet. Proliferation financing risk assessment requires real-time sanctions screening, transaction monitoring calibrated to PF typologies, documented CDD trails, and audit-ready records maintained indefinitely given the removal of the statute of limitations.
Compliance monitoring software in Dubai designed for the UAE’s regulatory environment gives compliance teams the infrastructure to meet these requirements systematically rather than reactively. At First Compliance, our platform covers every dimension of this framework:
- Sanction Screening with real-time alerts across AML, CFT, and CPF designation lists
- Transaction Monitoring with configurable rules for proliferation financing typologies
- Risk Management modules that support enterprise-wide risk assessments, including PF risk categories
- Onboarding and Due Diligence with beneficial ownership verification built in
- Compliance Case Management for documenting investigations and escalation trails
- Regulatory Reporting for STR submission and FIU engagement via goAML
For regulated businesses managing three distinct criminal offence categories simultaneously, the operational case for integrated compliance monitoring software in Dubai has never been clearer.
Act Now, Not After an Inspection
The inclusion of proliferation financing as a standalone offence creates a new risk profile that directors must be mindful of when conducting business in the UAE. Directors must ensure there are adequate AML, CFT, and proliferation financing procedures in place to deal with greater scrutiny and oversight.
Every regulated business in the UAE now operates under a three-offence compliance obligation. The firms that update their frameworks now, with the right compliance monitoring software in Dubai supporting their teams, will be the ones that face inspections with confidence rather than exposure.
First Compliance is ready to support your team through this transition. Schedule a free demo to see how our platform covers every requirement of Federal Decree-Law No. 10 of 2025.
Frequently Asked Questions
What is the difference between proliferation financing and terrorist financing under the new law?
Terrorist financing involves providing funds to support terrorist acts or organisations. Proliferation financing specifically covers the financing of the development, production, acquisition, or transfer of weapons of mass destruction, including nuclear, chemical, biological, and radiological weapons, as well as dual-use goods and related technologies. Under Federal Decree-Law No. 10 of 2025, both are now standalone criminal offences alongside money laundering.
Does the new law apply to free zone companies?
Yes. DIFC and ADGM authorities are specifically named as supervisory bodies under the new framework, and the law applies to all regulated entities operating in the UAE regardless of whether they are mainland or free zone registered.
What does "dual-use goods" mean in the context of proliferation financing?
Dual-use goods are items, materials, software, or technologies that have legitimate civilian applications but can also be used in the development of weapons of mass destruction. Transactions involving dual-use goods are a key proliferation financing red flag under the new law and must be captured within your transaction monitoring typologies and CDD procedures.
How quickly do regulated businesses need to update their compliance programmes?
The law has been in force since 14 October 2025 and the executive regulations under Cabinet Resolution No. 134 of 2025 became applicable from 14 December 2025. Compliance obligations are active now. Any regulated entity that has not yet updated its risk assessment, policies, and screening systems is already operating outside the requirements of the law.
How does compliance monitoring software in Dubai help manage proliferation financing risk specifically?
It automates the screening of customers and transactions against PF-specific sanctions lists, flags dual-use goods transactions through configurable monitoring rules, maintains a documented audit trail for every CDD and risk assessment decision, and generates the regulatory reports required for FIU submission. For senior management facing personal liability under the new law, an auditable, systematic compliance record is not just operationally useful. It is a legal protection.
Trusted Global Compliance Partner
Advanced Screening & Reporting Tools
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Trusted Global Compliance Partner
Advanced Screening & Reporting Tools
Scalable Solutions for Growing Businesses
First Compliance is a comprehensive compliance and due diligence software platform designed to meet the rigorous standards of global regulations. Developed by a team of experts in law, compliance, and anti-financial crime, our tool leverages advanced technology to streamline investigations and ensure thorough due diligence.
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First Compliance is a comprehensive compliance and due diligence software platform designed to meet the rigorous standards of global regulations. Developed by a team of experts in law, compliance, and anti-financial crime, our tool leverages advanced technology to streamline investigations and ensure thorough due diligence.