Asset Freezing in the UAE: When Authorities Can Seize Funds or Propert

The UAE does not have a single emergency powers statute that activates asset-freezing authority during a national crisis. What it has is considerably broader: a set of overlapping legal frameworks that give prosecutors, courts, and financial regulators extensive powers to freeze and seize assets at any time, under ordinary law, without any declared state of emergency. Those powers were significantly strengthened by Federal Decree-Law No. 10 of 2025 on Combating Money Laundering, Terrorism Financing, and Proliferation Financing, which came into force on 14 October 2025. The current conflict with Iran has made the practical implications of that framework directly relevant to a large number of UAE residents and businesses.

This article explains what the law actually provides, what changed with the 2025 reforms, and where the specific risk now sits for individuals and companies with cross-border financial exposure.

What triggers asset freezing in the UAE

Three separate legal tracks can result in an asset freeze, each with its own trigger, its own procedural timetable, and its own challenge rights.

Understanding which track applies is the starting point for any meaningful response. A freeze obtained through the AML track and a civil precautionary attachment are governed by different laws, heard by different courts, and challenged through different procedures. Conflating the two is a common and costly mistake.

What the 2025 AML law changed

The 2025 AML law replaced the 2018 framework and introduced several changes that are directly relevant to asset-freezing risk. The UAE Financial Intelligence Unit gained significantly expanded powers.

Under the previous law, freezing authority rested with the Central Bank Governor and was capped at seven working days. Under the new law, the FIU Head can order asset freezes for up to thirty days on suspicion alone, without prior notice, and without any obligation to inform the account holder before acting. The Public Prosecutor can extend that period beyond thirty days.

Four other changes carry practical weight for businesses and individuals operating in the UAE:

• The scope of assets covered now expressly includes digital assets, virtual assets, and encrypted holdings, alongside conventional bank accounts, property, and securities.
• The evidentiary threshold for money laundering prosecution has been lowered. Prosecutors can now rely on circumstantial evidence, which makes it easier to obtain and sustain a freezing order at the early stages of an investigation.
• Foreign freezing and confiscation orders can be executed in the UAE without a separate local investigation, subject to procedural safeguards. An asset freeze obtained in another jurisdiction can be given effect in the UAE through a streamlined cooperation process.
• Personal liability for managers and directors has been introduced for institutional AML failures, a change detailed further in our article on UAE AML rule changes for financial companies.

What is the difference between a freeze and a seizure

The 2025 law draws a clear distinction, and the practical difference is significant.

A freeze prohibits the transfer, conversion, or movement of funds while they remain in the possession of the owner or account holder. The assets stay where they are; the owner simply cannot move them for the duration of the order.

A seizure goes further. The competent authority assumes actual control and management of the assets. The owner loses access entirely, not merely the ability to transact.

Both can be applied to bank accounts, real estate, shares and securities, vehicles, and digital assets. Both preserve the rights of bona fide third parties: a freeze or seizure order does not automatically extinguish the claims of a creditor who had no knowledge of the underlying conduct. Asserting that protection requires a formal legal challenge, however, and it cannot be done passively.

Does the Iran conflict create additional risk

Yes, for specific categories of people and businesses.

UAE companies that maintain trade, banking, or investment relationships with Iranian counterparties are operating inside a sanctions environment that was already complex before the current escalation. The UAE administers its own national sanctions list through the Executive Office for Control and Non-Proliferation, in addition to implementing the relevant UN Security Council frameworks. Any financial transaction connected to a sanctioned entity, even indirectly or through intermediaries, can trigger the AML freezing powers under the new law. The fact that a relationship predates the current hostilities does not provide protection if the counterparty is now subject to a new or extended designation.

For private individuals, the risk is more limited but not negligible. Dual nationals, residents with family financial ties to Iran, and anyone who has transferred funds to or from Iranian accounts in the recent period may find those transactions subject to increased scrutiny. This does not mean every such person faces imminent enforcement action, but it does mean that proactive legal assessment is more valuable before an inquiry arrives than after.

The broader context also matters. UAE enforcement agencies have ramped up activity significantly since the country was removed from the FATF grey list in February 2024. The Central Bank issued over AED 370 million in fines during 2025 alone. A national security environment that focuses regulatory and prosecutorial attention on financial flows is one in which the expanded powers of the 2025 law are more likely to be deployed.

How to challenge a freezing order in the UAE

The law provides a formal challenge mechanism. Any interested party may file a grievance against a Public Prosecution freezing decision or an FIU order. The grievance is submitted as a written report to the competent criminal court, which must rule within fourteen working days of the application. The court will request a memorandum from the Public Prosecution before deciding.

Three points are worth noting for anyone who has received or anticipates a freezing order:

• The challenge window opens from the date the order is issued, not from when you become aware of it. Delays in obtaining legal advice reduce the time available to respond effectively.
• The bona fide third party defence is a meaningful route in cases where funds were frozen because of another party's conduct rather than your own. Establishing it requires demonstrating absence of knowledge, which is a factual question that benefits from early evidence preservation.
• A civil precautionary attachment obtained by a creditor follows a different procedure entirely. Debtors have seven days from issuance to file a formal objection, and the creditor is required to submit an indemnity undertaking against unjustified attachment. For more on how civil enforcement works in practice, see our guide on cheque risk management for UAE companies, which covers the overlap between debt enforcement and personal asset exposure.

What to do if you are concerned about your position

If you have received a freezing or seizure order, the immediate priority is legal advice before the challenge window narrows. If you have not received any formal communication but have reason to believe your accounts or assets may be under scrutiny, a legal assessment of your exposure before any inquiry materialises will generally produce better outcomes than waiting.

This applies in particular to businesses with Iranian counterparty relationships, companies in sectors that have been subject to increased AML scrutiny, individuals with complex cross-border financial arrangements, and anyone uncertain about how recent international transfers will be read under the new framework.

Kayrouz and Associates advises on asset freezing, criminal law, dispute resolution, and AML compliance matters across UAE onshore and free zone jurisdictions. If you have concerns about your position, contact our team for a confidential consultation.

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