REGULATORY UPDATE | UNITED ARAB EMIRATES
UAE Introduces New PSTR Framework for Suspicious Transactions and Fund Freezing
What reporting entities need to know about UAEFIU Regulation No. (1) of 2026
ISSUED BY
UAE Financial Intelligence Unit (UAEFIU)
EFFECTIVE DATE
14 December 2026
(scheduled)
APPLIES TO
Financial institutions, DNFBPs and VASPs
SUMMARY
UAEFIU Regulation No. (1) of 2026 helps the UAE Financial Intelligence Unit (UAEFIU) act faster when funds linked to crime may be moved. It introduces the Postponement Suspicious Transaction Report (PSTR), an urgent report for cases where there is an imminent risk that suspicious funds could be transferred or withdrawn. It also gives the UAEFIU binding Suspension, Freezing and Monitoring Orders that reporting entities must act on within set timeframes. The Regulation is issued under Article (5) of Federal Decree-Law No. (10) of 2025 (the Decree-Law). According to the UAEFIU, it is scheduled to enter into force on 14 December 2026.
What is a PSTR?
A PSTR is an urgent report filed when a reporting entity suspects, or has reasonable grounds to suspect, that a transaction or funds may be linked to crime, and there is an imminent risk that the funds could be moved or withdrawn. Under the Decree-Law, a suspicious transaction includes an attempted transaction, not only a completed one. The PSTR gives the UAEFIU time to review the case before the transaction is completed.
A PSTR does not replace the Suspicious Transaction Report (STR). It is an additional mechanism, and existing STR obligations continue to apply.
| PSTR | STR | |
|---|---|---|
|
Purpose |
Allows the UAEFIU to review a case before a suspicious transaction is completed |
Reports suspicion that funds are linked to crime |
|
When used |
Imminent risk that funds could be transferred, withdrawn or dissipated |
Whenever there are reasonable grounds to suspect, regardless of the value of the transaction |
|
Timing |
Filed within 24 hours where the risk is imminent; the transaction is generally held for up to three business days unless the UAEFIU authorises it earlier |
Filed without delay and directly to the UAEFIU under Article (18) of the Decree-Law |
When a PSTR might be needed?
Indicative considerations include:
- A transaction above a value threshold. The threshold does not apply to higher-threat cases, such as organised crime, third-party money laundering and terrorism financing.
- A customer who is a politically exposed person (PEP) or otherwise high risk.
- Information suggesting that the owner of the funds may leave the country.
- Circumstances in which the funds cannot be effectively monitored.
No single indicator proves criminal activity. The decision to report should rest on the legal requirements, the available information and the circumstances of the case.
What orders can the UAEFIU issue?
These powers rest on Article (5) of Federal Decree-Law No. (10) of 2025. Under that Article, the Chief of the UAEFIU may order a suspension or a freeze without prior notice to the customer. Suspension orders are delivered through the Integrated Enquiry Management System (IEMS) and are binding on reporting entities.
| Order | Maximum period | What the reporting entity must do |
|---|---|---|
|
Suspension Order |
Up to 10 business days |
Stop the specified transaction. Acknowledge receipt of the order through IEMS within two hours, and give the UAEFIU updates on the status of the funds. Do not tell the customer about the suspicion or the review (tipping off). |
|
Freezing Order |
Up to 30 days, extendable by the Attorney General or their delegate |
Freeze the funds immediately and notify the UAEFIU and the customer. Lift the freeze when the order is cancelled or expires, unless it is extended. |
|
Monitoring Order |
Up to 30 days |
Monitor transactions involving the specified customers for the period set in the order. A monitoring order may apply together with a suspension or freezing order. |
If an order cannot be carried out or is delayed, for example because the funds have already moved, the reporting entity must give the UAEFIU a written explanation within two hours of receiving the order.
What are the penalties for non-compliance?
The Regulation operates alongside Federal Decree-Law No. (10) of 2025, which already sets the following penalties for conduct linked to this framework.
- Failure to report a suspicion (Article 28): Deliberately or through gross negligence breaching the duty to report suspicious transactions is punishable by imprisonment and a fine of AED 100,000 to AED 1,000,000, or by either penalty.
- Tipping off and breach of freezing orders (Article 29): Warning another person about a suspicious transaction under review, or deliberately or through gross negligence violating an order on freezing, is punishable by imprisonment and a fine of not less than AED 50,000, or by either penalty.
- Administrative penalties (Article 17): The Supervisory Authority may impose a warning, a fine of AED 10,000 to AED 5,000,000 for each violation, a ban or restriction on the activity, and licence revocation.
- Legal persons (Article 27): Where representatives, directors or agents commit these offences on behalf of a company, the company faces a fine of AED 200,000 to AED 10,000,000.
The Regulation may contain its own provisions on liability. Reporting entities should confirm them in the official text.
How should reporting entities prepare?
- Update policies: Add PSTRs and the handling of the three order types to AML/CFT procedures.
- Define escalation: Decide who can make urgent decisions, who is the Compliance Officer or MLRO contact for orders, and how operational and decision-making roles are kept separate.
- Plan for 24/7 cover: Be able to receive, acknowledge and carry out orders at any time, including weekends and public holidays.
- Train staff: Explain the difference between a PSTR and an STR, and the prohibition on tipping off.
- Check system access: Confirm that goAML and IEMS access, user permissions and handovers work, and that someone monitors IEMS for orders.
- Keep an audit trail: Record decisions, communications and actions, and keep the records for at least five years.
- Follow UAEFIU guidance: The UAEFIU has said it will publish guidance for reporting entities with practical examples. Monitor official UAEFIU communications and update procedures when it is released.
Why this matters for your business
Identifying and reporting suspicious activity is no longer enough. Reporting entities must also be able to pause transactions, carry out UAEFIU orders quickly and document what they did. The immediate priority is to test existing reporting, escalation and out-of-hours arrangements before the scheduled date of 14 December 2026, and to review the Regulation itself to confirm what applies to your activities.
Important note
This article is for general information only. It is not legal advice and does not replace the regulation, official UAEFIU instructions or guidance from the relevant supervisory authority. Consult the official Arabic text where interpretation is required, and obtain legal or compliance advice for your specific activities. The effective date is the date announced by the UAEFIU and should be confirmed against official publication.
Sources
UAE Financial Intelligence Unit: announcement of Regulation No. (1) of 2026
Federal Decree-Law No. (10) of 2025 on Anti-Money Laundering and Combating the Financing of Terrorism and Proliferation Financing (Articles 5, 17, 18, 27, 28 and 29)
https://uaelegislation.gov.ae/en/legislations/3314
Waystone Compliance Solutions: Regulatory Update June 2026 – ME Region (summary of the UAEFIU webinar of 3 June 2026 and FSRA Notice No. FSRA/FCCP/96/2026)
https://compliance.waystone.com/regulatory-update-june-2026-me-region/
Regulatory overview | UAE | October 2026