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Freezing Bank Accounts Without Judgment in UAE Law
An account holder — whether an individual or a company — may discover that their account has been frozen suddenly and without prior warning, so that they can neither withdraw, transfer, nor dispose of their funds, even though no judgment has been issued against them and no formal charge has been brought. This situation, despite the anxiety it provokes, signifies neither conviction nor accusation; freezing is, in essence, a precautionary and temporary measure for which the UAE legislator has drawn a precise framework defining the authority that holds the power to impose it and its duration. Understanding this framework is the difference between a situation managed legally and calmly, and a loss resulting from a wrong move.
Freezing Bank Accounts Without a Judgment or Charge Under UAE Law: What Is It, Who Holds the Power, and How Long Does It Last?
The UAE legislator reorganized this matter in Federal Decree-Law No. (10) of 2025 on combating money laundering, the financing of terrorism, and the financing of the proliferation of weapons, issued on 30 September 2025, which expressly repealed Federal Decree-Law No. (20) of 2018; its Executive Regulation was issued by Cabinet Resolution No. (134) of 2025. This law defined freezing clearly and specified the authorities competent to order it and its durations. What follows is a detailed account of all of that, grounded in the text of the law.
First: What Is Meant by Freezing, and How Does It Differ from Seizure and Confiscation?
Article (1) of the Decree-Law distinguishes between three concepts that are frequently confused by the non-specialist, despite the fundamental difference in their legal effects. Freezing is the prohibition imposed on transferring, disposing of, or moving funds, while they remain in the hands of their owner or holder throughout the period the decision is in force. Seizure, by contrast, is where the competent authority assumes actual control over the funds and their management. Confiscation, in turn, is a permanent deprivation of ownership, which can only occur by virtue of a judgment issued by a competent court.
| Criterion | Freezing | Seizure | Confiscation |
|---|---|---|---|
| Nature of the measure | A ban on disposing of the funds | A ban on disposal coupled with actual control | Permanent deprivation of ownership |
| Who holds the funds | They remain with the owner or holder | The competent authority takes actual custody | Ownership is transferred permanently |
| Basis of the measure | Decision of a competent authority | Decision of a competent authority | Judgment of a competent court |
| Duration | For as long as the decision is in force (temporary) | For as long as the decision is in force (temporary) | Permanent |
The Meaning of “Without Prior Notice”
The law defined the phrase “without prior notice” as taking the measure without any prior notification to, or involvement of, the owner, the customer, or the party affected by it. This explains why freezing occurs suddenly and without prior warning — the element of surprise is intended by the law so that the funds are not spirited away before the measure is taken.
Second: Why Is Freezing Permitted Without a Judgment or a Charge?
The essence of the answer is that freezing is a precautionary and temporary measure tied to the period the decision is in force; it is neither a penalty nor proof of guilt. The law is built on the notion of reasonable suspicion that the funds are linked to crime, not on the establishment of the crime. The Decree-Law expressly provided that money laundering is an independent crime, and that a conviction for the predicate offense is not required in order to establish the illicit source of the proceeds; rather, knowledge is inferred from the factual and objective circumstances. Accordingly, the freezing measure precedes — by its very nature — the judgment stage, and is taken to protect the funds from being spirited away until the investigation or trial concludes.
The existence of a decision to freeze an account does not mean that its holder is convicted or even formally accused; it is a temporary measure tied to the period of the decision, aimed at preserving the funds under suspicion, and it lapses when its cause ceases, when its term expires, or when it is revoked.
Third: The Authorities Competent to Issue a Freezing Order
The Decree-Law specified the authorities that hold the power to issue a freezing order, each with its own scope and duration:
Article (5) of the Decree-Law, as detailed by Article (51) of the Executive Regulation, permits the Head of the Unit to order — without prior notice — the halting or suspension of an operation suspected of being linked to the crime, and to order the freezing of suspected funds held at financial institutions, Designated Non-Financial Businesses and Professions, and virtual asset service providers, based on the Unit's analysis of the reports. The Head of the Unit notifies the Public Prosecutor of the freezing decision and the grounds for suspicion, and may amend or revoke it.
Article (6) of the Decree-Law, corresponding to Article (52) of the Executive Regulation, permits the Public Prosecution and the competent court — as the case may be and without prior notice — to order the freezing or seizure of criminal funds or property, to prohibit their management, and to impose a travel ban, until the investigation or trial concludes, while taking whatever is necessary to prevent any disposal intended to evade those orders.
Article (1) defined targeted financial sanctions as the freezing of funds and the prohibition of making them available for the benefit of those identified by Cabinet resolutions on terrorism lists and by UN Security Council resolutions. The law obliges institutions to apply the instructions of the Executive Office immediately, and penalizes any breach. The details of this track are governed by the relevant Cabinet resolutions in force.
A distinction must be drawn between the investigative/penal freezing track (by decision of the Unit or the Public Prosecution under Decree-Law 10/2025) and the freezing track under the sanctions lists and targeted financial sanctions (linked to Cabinet resolutions and UN Security Council resolutions). Each track has its own authority and its own mechanism of response, and conflating the two is among the most common mistakes.
Fourth: The Legal Durations of Freezing
The law did not leave the duration of freezing open-ended and without limit; rather, it restricted it to specific periods depending on the issuing authority. Under Article (5) of the Decree-Law and Article (51) of the Executive Regulation, the Head of the Unit's order to halt or suspend an operation is for a period not exceeding ten working days, while their order to freeze funds is for a period of thirty days, extendable by the Public Prosecutor or their delegate for the period they determine upon the Unit's request. The Regulation obliged the Head of the Unit to submit to the Public Prosecutor a proposal to revoke the freeze-extension decision once its grounds cease.
It obliged financial institutions, Designated Non-Financial Businesses and Professions, and virtual asset service providers to lift the freezing decision in two cases: if the decision is revoked by the Head of the Unit, or if the thirty-day period lapses without extension. As for freezing by the Public Prosecution or the competent court under Article (6) of the Decree-Law and Article (52) of the Regulation, it continues until the investigation or trial concludes.
Who Executes the Freezing Order?
Article (54) of the Executive Regulation clarified that decisions to freeze funds held at financial institutions and virtual asset service providers are executed only by the competent supervisory authority or the Unit, as the case may be. The bank executes the decision; it does not issue it of its own accord.
Fifth: Why Are Accounts Frozen in the First Place? Banks' Obligations and the Oversight of Them
Often the freeze begins with the bank itself, in performance of its legal obligations. Article (18) of the Decree-Law — as detailed by Article (18) of the Executive Regulation — obliged financial institutions, upon suspicion or upon the existence of reasonable grounds to suspect an operation or funds connected with the crime, to report to the Financial Intelligence Unit without delay, without invoking the provisions of banking or professional secrecy. The Regulation obliged them to apply due diligence measures, not to open accounts in anonymous or fictitious names, not to deal with shell banks, and to apply the instructions of the Executive Office immediately. Article (20) likewise prohibited carrying out financial activities without a license, registration, or enrollment.
Banks themselves are subject to oversight and inspection — periodic or unannounced and without prior notice — and to administrative penalties upon breach, which explains their strictness in applying the procedures. The Decree-Law regulated the competences of the supervisory authorities and the administrative penalties in Articles (16) and (17). Within the framework of the Central Bank, transitional effect continues — under Article (41) — for the prior supervisory decisions to the extent they do not conflict with the new law.
Frequently Asked Questions
Legal References
- Federal Decree-Law No. (10) of 2025 on combating money laundering, the financing of terrorism, and the financing of the proliferation of weapons, issued on 30 September 2025 (in force, and repealing Federal Decree-Law No. 20 of 2018).
- Cabinet Resolution No. (134) of 2025 on the Executive Regulation of Federal Decree-Law No. (10) of 2025, issued on 29 October 2025.
- The Cabinet resolutions regulating terrorism lists and targeted financial sanctions, in force in respect of that track.
- The Central Bank Board of Directors' resolution on the procedures for the oversight, inspection, and administrative penalties of financial institutions, in transitional force under Article (41) of Decree-Law No. (10) of 2025.
This English text is a translation. In the event of any discrepancy, the Arabic version shall be the authoritative reference.