Money laundering undermines economies, facilitates organised crime, and erodes trust in financial systems. At the core of effective Anti-Money Laundering (AML) frameworks is the concept of predicate offences, the criminal acts that generate illicit proceeds later moved through the financial system.
With the UAE’s landmark Federal Decree-Law No. 10 of 2025 on Anti-Money Laundering, Combating the Financing of Terrorism and Proliferation Financing became effective from October 14, 2025, understanding predicate offences is essential for institutions operating in or with exposure to UAE markets.
What Are Predicate Offences under UAE AML-CFT Law?
Predicate offences are underlying criminal acts that produce proceeds which may then be laundered. In the context of UAE law, a predicate offence is any criminal act punishable under applicable law that generates proceeds of crime, including terrorist financing, proliferation financing, and evasion of direct or indirect taxes, whether committed inside or outside the UAE, provided the act is punishable in both jurisdictions.
These predicate offences form the legal basis for identifying, investigating, and prosecuting money laundering. Without them, there is no “dirty money” to launder. The Law explicitly links predicate offences to money laundering liability and defines how proceeds and criminal property should be treated.
Why Predicate Offences Matter
Predicate offences are critical components of AML compliance and oversight:
Legal Foundation for AML Enforcement: Money laundering is defined in the Law as knowingly transforming or handling proceeds of a predicate offence to conceal their illicit source.
Risk Identification: Entities must understand the types of predicate offences to monitor and report potentially suspicious transactions.
Global Regulatory Alignment: The UAE’s updated AML framework reflects global standards by expanding the definition of predicate offences to include previously under-covered crimes such as tax evasion.
Proof Standards: Under the Law, conviction of the predicate offence is not required to establish money laundering. Knowledge, intent, or suspicion maybe inferred from objective circumstances and evidence.
Key Predicate Offences Covered
While the Law doesn’t list every predicate offence exhaustively in the text you linked, it aligns with widely recognised categories found in international standards. These include:
- Terrorism & Terrorist Financing
- Proliferation Financing
- Tax Evasion (direct and indirect taxes)
- Fraud, Corruption & Bribery
- Organised Crime, Smuggling & Trafficking
- Drug-Related and Cyber Criminal Acts
Including tax evasion explicitly within the legal definition strengthens enforcement and ensures that a broad spectrum of criminal conduct can trigger AML scrutiny.
How the UAE Law Defines Money Laundering
Under the Law:
A person commits money laundering if they knowingly (or where evidence sufficiently indicates) engage in acts involving proceeds derived from a predicate offence, including:
- Converting, transferring, or otherwise handling the proceeds to disguise or conceal their illegal origin.
- Concealing the nature, source, location, movement, or ownership of proceeds.
- Acquiring, possessing, or using such proceeds.
- Assisting offenders in evading punishment for predicate offences.
Importantly, criminal liability for money laundering is independent of any conviction for the predicate offence.
Implications for Businesses and Compliance
The Law places clear expectations on financial institutions, designated non-financial businesses and professions (DNFBPs), virtual asset service providers, and non-profit organizations:
- Enhanced Due Diligence
Entities must conduct strong Customer Due Diligence (CDD) and ongoing monitoring to identify connections to predicate offences.
- Suspicious Transaction Reporting
Suspicious activity, especially where funds may originate from predicate offences, must be reported to the UAE Financial Intelligence Unit through the goAML reporting system.
- Penalties for Non-Compliance
The Law imposes significant administrative fines that may reach to AED 100 million for legal person, depending on the nature and severity of the violation and potential criminal penalties for failures to comply with AML reporting, record-keeping, and internal controls.
Frequently Asked Questions (FAQs)
Q1. What’s the difference between predicate offences and money laundering?
A predicate offence is the criminal act generating illicit funds; money laundering is the process of disguising those funds to make them appear legitimate.
Q2. Does the UAE Law require a conviction of the underlying crime to prosecute money laundering?
No. Conviction of the predicate offence is not required. Evidence that funds are linked to an offence can be inferred from objective circumstances.
Q3. Does the law apply to activities outside the UAE?
Yes. where the act constitutes a criminal offence under both UAE law and the law of the jurisdiction in which it was committed.
Q4. Are all financial institutions responsible for AML compliance?
Yes. financial institutions, DNFBPs, virtual asset service providers and designated non-profits must comply with AML duties, including risk assessments and reporting obligations.
Q5. What happens if an entity fails to report transactions linked to predicate offences?
Failure to report may result in administrative sanctions, significant financial penalties, criminal liability, reputational damage, and regulatory enforcement actions
How Jitendra Chartered Accountants Can Assist You
At Jitendra Chartered Accountants, we specialise in supporting businesses with AML compliance and regulatory readiness, including understanding and operationalising predicate offence risk frameworks.
Our Services Include:
- AML Gap Analysis & Risk Assessment: Identify exposure to predicate offence risks and AML weaknesses.
- Policy & Procedure Development: Draft and tailor AML/CFT policies that reflect UAE legal requirements.
- Training & Awareness Programmes: Equip your compliance teams and staff with practical knowledge and tools.
- Reporting & Documentation Support: Help manage Suspicious Transaction Reports and regulatory submissions.
- Regulatory Readiness Reviews: Prepare your business for inspections and audits by supervisory authorities.
- With deep expertise in UAE AML law and global best practices, we help you protect your organisation from financial crime risks, penalties and reputational harm.