Corporate Criminal Liability in the UAE: What Legal Entities Must Know under Federal Law No. 36 of 2022

Introduction

While the UAE continues to attract regional and international businesses and entrepreneurs, at the same time, regulatory scrutiny has surged: in June 2025, UAE authorities imposed AED 339 million in AML/CTF fines, including license suspensions and heavy penalties applied to banks, exchange houses and insurers. These developments mark a clear shift ─ corporate entities in the UAE no longer operate under a laissez faire regime. Instead, they face a zero tolerance stance on financial crime and an increasing number of real world enforcement cases. This backdrop highlights why understanding the corporate criminal liability framework under Federal Law No. 36 of 2022 is more crucial than ever.

I. What is Corporate Criminal Liability?

Corporate criminal liability refers to the legal accountability of a legal entity, e.g., companies or institutions, for criminal offenses committed in its name or for its benefit by its directors, employees, or representatives. Unlike natural persons who commit crimes directly, a company may be held responsible when an individual acting on its behalf commits an offense tied to its operations.

The UAE legislator, in alignment with international best practices and economic realities, recognizes the growing role of corporate entities in the commercial and investment sectors. Therefore, the Federal Penal Code has established a clear legal framework for holding companies criminally liable, ensuring transparency, accountability, and the rule of law.

II. Conditions for Holding a Legal Entity Criminally Liable

For a company or an institution to be held criminally liable under Article 66 of Federal Law No. 36 of 2022, the following conditions must be met:

1. The offense must be committed by a natural person (director, employee, or representative) linked to the company.
2. The crime must be committed in the name of or for the benefit of the company.
3. The offense must occur during the performance of duties or through misuse of the corporate position.

III. Corporate Criminal Liability and Individual Criminal Liability

Under Federal Decree-Law No. 36 of 2022 (UAE Penal Code) and specifically Article 66, a legal entity (company or institution) may be held criminally liable if:

• A crime is committed by one of its directors, managers, or employees,
• The act is committed in the name of or for the benefit of the legal entity.

However, such liability does not negate the individual criminal liability of the natural person who committed the crime. Notably, government bodies and official entities are exempt unless otherwise stated by law.

IV. Types of Offenses Legal Entities May Be Liable For

The law identifies several categories of offenses that may trigger corporate criminal liability, including but not limited to:

1. Economic Crimes

• Money laundering
• Tax evasion
• Bribery and corruption

2. Commercial Offenses

• Fraud and misleading advertising
• Intellectual property violations
• Use of unauthorized systems
• Data breaches and information leakage

V. Risks and Exposure

Penalties imposed on companies found criminally liable vary based on the nature and severity of the offense. These may include:

1. Fines – often substantial, based on the size and scale of the company and offense; fines may reach up to AED 5 million.
2. Suspension of Activity – temporary or permanent suspension depending on the gravity of the offense.
3. Revocation of Trade License – cancellation of the company’s right to operate.
4. Asset Forfeiture – confiscation of tools, assets, or proceeds involved in the offense.
5. Ban from Government Contracting – disqualification from bidding or contracting with government entities.

Conclusion

The UAE’s legal framework underscores that corporate entities are not above the law. With the issuance of Federal Law No. 36 of 2022, companies operating in the UAE must ensure robust compliance mechanisms to avoid exposure to criminal liability. Legal advisors and in-house counsel must proactively assess internal controls and regulatory adherence to mitigate risks and uphold corporate integrity.

If you have any questions, or would like to find out more about the exposure of your company and potential risks, please contact Mohamed Taha: mohamed.taha@sat-law.com.

Written by Mohamed Taha.

15 July, 2025