Why UAE bank accounts are being frozen, and the 2025 law behind it

The freezing is real. The order is not the central bank's.

The search term is telling: people are asking whether the UAE central bank is freezing accounts. The premise behind it is half right. The freezes are real, they are more frequent, and through 2025 and 2026 they have hit legitimate corporate accounts at the major banks with little warning. What is wrong is the picture of a central authority reaching into accounts on a policy of its own.

That is not how it works, and the distinction matters for anyone trying to respond. A specific account is frozen either by the bank itself, discharging its own legal obligations, or by the Financial Intelligence Unit acting on a report the bank has filed. The Central Bank of the UAE (CBUAE) supervises the banks and sets the standard they must meet. It is not the body that freezes an individual company's account. The freeze the account holder feels is the last visible step of a process that began inside a bank's compliance system and runs on rules the state rewrote in late 2025.

Understanding the machine is the whole point, because the response to a freeze depends entirely on which part of the machine produced it. This note explains what changed in the law, why banks now freeze first and say nothing, how the Financial Intelligence Unit freeze runs, and the recourse that works when the obvious ones do not.

What changed on 14 October 2025

The reason banks behave differently now is that the law they answer to changed. Federal Decree-Law No. 10 of 2025 on anti-money laundering, combating the financing of terrorism, and the financing of proliferation came into force on 14 October 2025. It repealed and replaced the previous regime, Federal Decree-Law No. 20 of 2018, and it is implemented through an executive regulation in Cabinet Resolution No. 134 of 2025.

Three changes in the new law explain the change in bank behaviour.

• A lower threshold for liability. Under the new law a person is treated as committing money laundering where they know, or should reasonably have suspected, that funds derive from criminal activity. The shift from actual knowledge to what a person should reasonably have suspected is a move to a negligence-style standard, and it applies to the professionals inside the banking system as much as to account holders.
• Proliferation financing raised to the same footing. The financing of proliferation, meaning the funding of weapons of mass destruction, now sits alongside terrorist financing as a core target of the regime, which widens the range of transactions and counterparties that trigger scrutiny.
• Heavier penalties and wider powers. The new law increases fines and prison terms, expands the investigative and enforcement powers of the authorities, and establishes a new oversight body. It also brings virtual assets and their service providers formally within the regime.

The law did not invent the freeze. Freezes existed under the 2018 regime, and the analysis of the three ways a UAE corporate account is frozen still holds for the mechanics. What the new law changed is the incentive on the bank, and that is what turned an occasional event into a wave.

Why a bank now freezes first and explains nothing

A bank does not freeze a client's account for pleasure. It freezes because the cost of getting it wrong has risen sharply, and the cheapest way for the bank to protect itself is to act early and report.

The people who carry the risk inside a bank are its compliance officers and directors. Once the standard is what a person should reasonably have suspected, a compliance officer who waits, asks the client for an explanation, and turns out to have missed a warning sign is personally exposed under a lower threshold than before. Faced with that, the rational response is defensive: freeze the account at the first transaction that does not fit the customer profile, file a suspicious transaction report with the Financial Intelligence Unit through the goAML portal, and let the state decide. This is the behaviour often described as de-risking or supercompliance, and it is a predictable reaction to the law rather than a malfunction.

It also explains the silence that account holders find so maddening. A bank that has filed, or is considering filing, a suspicious transaction report is prohibited from telling the customer. Tipping off, meaning alerting the person that a report has been or may be made, is itself a criminal offence carrying fines and imprisonment. The relationship manager who will say only that the account is under review is not being unhelpful by choice. They are barred by law from saying more. The account holder is left to infer the cause from the documents the bank suddenly requests and the transactions it queries, which is exactly why the freeze feels arbitrary when it is not.

The FIU freeze, and the clock it runs on

Where the matter passes from the bank to the Financial Intelligence Unit, the freeze takes on a defined shape and a clock.

On a suspicious transaction report, the Financial Intelligence Unit can suspend a transaction for a short initial period, and where there are grounds to suspect a link to an underlying offence it can order the funds frozen. A freezing order commonly runs for 30 days, and it can be extended by the Public Prosecutor while an investigation continues, which in practice means an account can remain frozen well beyond the initial period before any charge is brought. The freeze is a preservation measure, intended to stop funds moving while the origin is examined, and it does not by itself imply a finding of guilt. That is cold comfort to a business whose operating account is the one frozen, but it is the correct legal reading, and it shapes the response.

The important point for an account holder is that this freeze does not sit with the bank at all. The bank is executing an instruction. Pressing the branch, escalating to the relationship manager, or threatening to move banks achieves nothing, because the decision-maker is the Financial Intelligence Unit and, on extension, the Public Prosecutor. The response has to be directed at the authority that holds the order, not the institution that is merely holding the money.

The recourse that fails, and the one that works

The instinct when an account is frozen is to find the complaints desk. In the UAE that instinct leads first to a door that is closed.

The financial ombudsman, Sanadak, was established by the Central Bank to resolve consumer disputes with financial institutions, and for many banking complaints it is the right forum. It is the wrong forum for a compliance freeze. Sanadak's mandate expressly excludes complaints that materially relate to a firm's risk management, internal pricing, or anti-money-laundering policies and practices. A complaint about an account frozen on a suspicious transaction report falls squarely inside that exclusion and will be declined. Time spent on it is time lost.

The route that works runs through the law that created the freeze. Federal Decree-Law No. 10 of 2025 provides a grievance mechanism: a person affected by a freezing order can challenge it before the competent court, and the challenge is heard within a defined and short period. Winning it is an evidential exercise, not a matter of persuasion. The defence of a bona fide party rests on documenting the source of the funds and the source of the wealth behind them, through clean audit trails, contracts, and a transaction history that reconciles with the declared business. This is forensic accounting work, prepared to a standard a court and an investigator will accept, and it is the opposite of an angry letter to the bank.

Where the freeze is not an anti-money-laundering matter at all but a court attachment obtained by a creditor, or a Federal Tax Authority recovery measure, the forum and the deadline are different again, and each has its own short window to object. The three routes do not overlap, and choosing the wrong one wastes the days that matter. The breakdown of the three freezes and their separate release routes sets out that diagnosis in full.

The knock-on that turns a freeze into a personal crisis

A frozen account is rarely a contained financial inconvenience. It becomes a personal exposure for the people running the company, and quickly.

A company whose account is frozen cannot run payroll through the Wage Protection System. Under the regime in force from 1 June 2026, salaries are due at the start of the month with a grace period of only ten days, after which the company is in breach, facing fines, suspension of new work permits, and travel bans that reach the general manager personally. A banking problem becomes a labour and immigration problem inside a single payroll cycle, often before the cause of the freeze has even been identified.

Behind most freezes that hit otherwise legitimate businesses is a structural weakness rather than a genuine crime. An ownership chain the bank cannot see through, a mismatch between the bank's records and the beneficial-ownership register under Cabinet Decision No. 109 of 2023, or a large turnover run through a flexi-desk with no real presence, are the patterns that read, to a compliance system, as something to hide. Releasing the account without fixing the structure invites the next freeze, because nothing about the trigger has changed.

The freezing wave is not a policy aimed at foreign owners, and it is not the central bank emptying accounts. It is a banking system that has rationally chosen caution under a law that punishes the failure to be cautious, and the businesses that stay clear of it are the ones built to be seen through rather than to hide.

Frequently asked questions

Is the UAE central bank freezing bank accounts?

Not directly. A specific account is frozen by the bank itself, under its own anti-money-laundering obligations, or by the Financial Intelligence Unit acting on a suspicious transaction report. The Central Bank of the UAE supervises the banks and sets the standards they follow, rather than freezing individual company accounts on its own initiative. The increase in freezes is real, but it comes from banks and the Financial Intelligence Unit applying a stricter law.

Why was my UAE bank account frozen with no reason given?

Because the bank is usually barred from telling you. Where a suspicious transaction report has been filed or is being considered, alerting the customer is the offence of tipping off, which carries fines and imprisonment. The relationship manager who says only that the account is under review is complying with the law, not withholding help by choice, so the reason has to be inferred from the documents and transactions the bank queries.

What is Federal Decree-Law No. 10 of 2025?

It is the UAE anti-money-laundering law that came into force on 14 October 2025, replacing Federal Decree-Law No. 20 of 2018, with an executive regulation in Cabinet Resolution No. 134 of 2025. It lowers the threshold for liability to what a person should reasonably have suspected, places proliferation financing alongside terrorist financing, raises penalties, expands enforcement powers, and brings virtual assets within the regime.

How long can the FIU freeze an account in the UAE?

A Financial Intelligence Unit freezing order commonly runs for 30 days. It can be extended by the Public Prosecutor while an investigation continues, so an account can stay frozen well beyond the first period before any charge is brought. The freeze is a measure to preserve funds during examination and does not by itself mean wrongdoing has been established.

Can I complain to Sanadak about a frozen account?

Not for an anti-money-laundering freeze. Sanadak, the Central Bank's financial ombudsman, resolves many consumer banking disputes, but its mandate expressly excludes complaints that materially relate to a firm's risk management or anti-money-laundering policies and practices. A complaint about an account frozen on a suspicious transaction report falls within that exclusion and will be declined, so it is not the route to pursue.

How do I challenge a UAE account freeze?

Through the mechanism that matches the type of freeze. An anti-money-laundering freeze is challenged by the statutory grievance to the competent court under Federal Decree-Law No. 10 of 2025, supported by forensic evidence of the source of funds and wealth. A court attachment is challenged before the court that granted it, and a Federal Tax Authority measure is resolved with the tax authority. Each has a short deadline, so diagnosing the freeze correctly comes first.

Why are UAE banks de-risking free zone companies?

Because a company with a large turnover but no real office, staff, or activity in the UAE looks, to a compliance system, like a shell used to move money. Under the stricter 2025 law the bank carries personal and corporate risk if it gets that judgment wrong, so it prefers to freeze and report rather than accept the exposure. A free zone company with genuine substance and transparent ownership is far less likely to be treated this way.

Can a frozen account stop my company paying salaries?

Yes, and this is the fastest-moving consequence. A frozen account cannot pay wages through the Wage Protection System, and under the regime from 1 June 2026 salaries are due at the start of the month with only a ten-day grace period. Once that passes the company faces fines, suspension of new work permits, and travel bans that reach the general manager personally, so payroll has to be managed as a separate and urgent track from the freeze itself.

Critical advisory. A freeze under the 2025 anti-money-laundering regime carries strict liability and personal exposure for directors, and it is rarely cured by correspondence with the bank. Operating through nominee ownership or flexi-desk substance, without institutional-grade compliance architecture, is a primary trigger for a suspicious transaction report and a Financial Intelligence Unit freeze. To assess your exposure and build a structure that survives scrutiny before an account is frozen, initiate a confidential briefing with our Managing Partners.