What is proliferation financing risk and how does the UAE assess it?
Proliferation financing (PF) is the provision of funds or financial services used, in whole or in part, for the manufacture, acquisition, development or transport of weapons of mass destruction and related goods, in breach of international obligations. The main PF risk for most businesses is sanctions evasion, where designated persons or networks disguise their involvement in restricted trade or financial flows.
The UAE assesses PF risk at national level and requires regulated entities to incorporate PF into their own risk assessment and to implement targeted financial sanctions without delay. Firms should screen customers and counterparties against sanctions lists, watch for evasion typologies such as front companies, complex ownership and dual-use goods, and freeze and report where a match arises.
Legal Reference (UAE):
· Federal Decree-Law No. 10 of 2025, Article 19(1)(e) — immediate implementation of targeted financial sanctions instructions.
· Federal Decree-Law No. 10 of 2025, Article 19(1)(a) — PF risk must be identified, assessed and continuously updated.
For more details, consult the full text of Federal Decree-Law No. 10 of 2025 or seek guidance from your AML compliance officer.