Understanding How UAE Law Regulates Giving and Protects Society from Financial Crime

By Khairallah Advocates & Legal Consultants

Charitable giving is a fundamental aspect of Emirati culture and Islamic values. However, in today’s interconnected world, even acts of goodwill, when not properly regulated, can be misused to fund unlawful activities such as money laundering or terrorism financing. The United Arab Emirates, aware of these risks, has developed a robust legal framework to ensure that donations are both legitimate and transparent.

This blog explores the key legal provisions, risks, and responsibilities surrounding charitable donations in the UAE and the critical role of legal defense in cases where good intentions may be misunderstood.

 Legal Framework: What the Law Says

1. Federal Law No. (3) of 2021 on Regulating Donations

This law is the cornerstone of charitable regulation in the UAE. It stipulates:

• Article 3: It is prohibited to collect, receive, or promote donations except through entities licensed and approved by the competent authority.
• Article 4: Any individual or entity must obtain prior approval from the competent authority before launching donation campaigns.
• Article 13: Violations may result in imprisonment and/or fines up to AED 500,000.

2. Federal Decree Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism (AML-CFT)

• Article 2: Defines money laundering and includes knowingly or unknowingly transferring funds that are the proceeds of criminal activity.
• Article 5: Includes penalties such as confiscation of funds, imprisonment, and corporate liability for institutions involved.

Together, these laws ensure that all charitable activities remain within legal and ethical boundaries and help protect donors from becoming unintentional participants in financial crime.

The Risk of Donating to Unlicensed or Unknown Entities

While many donors act with sincere intentions, a donation to an unlicensed or foreign-based organization, particularly one not recognized by UAE authorities, may lead to:

• Legal accusations of money laundering or terrorism financing
• Freezing of bank accounts
• Reputational damage for individuals and institutions
• Involvement in international investigations under the umbrella of the UAE’s commitments to the FATF (Financial Action Task Force)

Even well-meaning donors may face prosecution if due diligence is not observed.

Our Legal Role: Defending Lawful Intent

At Khairallah Advocates & Legal Consultants, we specialize in financial crime defense, including money laundering investigations.

In such sensitive matters, our legal strategy focuses on:

• Demonstrating the absence of criminal intent and the legitimate purpose behind the donation
• Proving that the client acted in good faith, often unaware of the unlawful status of the receiving entity
• Arguing for the application of Article 217 of the Penal Code regarding the absence of criminal intent where no damage was intended or foreseeable

We also engage in early-stage risk assessments for corporations and donors planning to contribute to regional or international causes.

 Safe and Compliant Donation Practices

To remain compliant and legally protected, we advise all individuals and businesses to:

1. Donate only through officially licensed charities (e.g., Emirates Red Crescent, Dar Al Ber, Khalifa Foundation).
2. Avoid all transactions with foreign charities not recognized or registered in the UAE.
3. Use the UAE’s approved donation portals, such as:
   • The General Authority of Islamic Affairs & Endowments website
   • Dubai’s “Smart Giving” platform
4. Consult legal counsel before launching any fundraising or donation initiatives.

 Final Thoughts

The act of giving should always be protected, not punished. But in a modern legal environment, even generosity must follow the law.

With strong legal awareness and compliance, we can preserve the spirit of charity while supporting national and global efforts to combat misuse of funds.

If you’re unsure whether your planned donation is legally compliant—or if you’re facing legal scrutiny over charitable contributions—we’re here to help.

Contact Khairallah Advocates & Legal Consultants

Your trusted advisors in financial crime, regulatory compliance, and litigation defense