It’s an understatement to say that the UAE has emerged as one of the fastest-growing economic powerhouses, from its state-of-the-art infrastructure to its ever-growing real estate sector. At the same time, with increased economic prosperity comes a heightened risk of money-laundering activities. In response, the UAE government has introduced Decree-Law No. 20 of 2018, which has made Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations the primary AML law.
With the real estate sector becoming vulnerable to malicious money-laundering activities, Cabinet Decision No. 10 of 2019 concerning the implementing regulation of this Decree-Law made real estate agents and brokers subjected to the AML law. Becoming applicable to real estate companies, this puts additional responsibility on them to adopt compliance measures. To help real-estate firms conduct due diligence on clients, in terms of identity and asset risk verification, it is recommended to consult top auditing firms in Dubai.
Understanding Anti-Money Laundering Law
In simple terms, anti-money laundering law refers to compliance measures that certain businesses need to undertake to proactively combat money laundering and terrorist financing. In tandem with this, a recent list provided by the Cabinet Decision listed real-estate companies as an internal part of Designated Non-Financial Businesses and Professions (DNFBPs). Additionally, it underlines the various CDD obligations, which have to be complied with by the real estate landscape, whilst also mentioning the ways to identify risk factors
Debunking the Importance of AML for Real Estate Companies
Being a sector that is permeated by high-value transactions, has certainly made real estate an attractive pathway for criminals. There is no doubt that UAE’s real-estate industry attracts investments from around the globe which makes it a target for criminals looking forward to legitimise their illegal endeavours. Last but not least, since the real estate market is marked by opaque and unregulated attributes, it makes it extremely difficult to track transactions, which in turn has added more to its vulnerability towards money laundering.
AML Compliance Guidelines for Real Estate Companies
As per the AML regulations, concerned parties are obliged to conduct a risk-based approach, making it mandatory for real estate companies in the UAE to adopt policies and controls based on their risk-based assessments. This will further guide them in the conduct of their due diligence process which is apt for customers by employing a customer identification program to obtain all required information.
It is important to note that the Ministry of Economy has obligated real estate brokers and agents in the country to maintain records and transaction data for at least five years.
So, all the real estate brokers and agents need to:
- Register with the AML Authority
- Appoint an AML Officer
- Keep AML Policy
- Ensure screening of all the Clients
- Enhanced Due Diligence
- Report to the Authority
- Offer Training and Guidance to the Employee
- Maintain the Records of All the Transactions and Clients
Decoding the Key Implementation Measures
Within the peripherals of real estate, it is pivotal that companies adopt necessary measures to manage and mitigate money laundering risks. One of the most significant measures is the implementation of robust and effective internal policies, controls, and procedures. At the same time, it’s important to assess these policies for effectiveness and update them accordingly as and when the need arises.
Furthermore, these policies should relate to customer due diligence and suspicious transaction reporting. It must also include requirements for governance and record-keeping. Overall, such procedures need to ensure management and mitigation of money laundering risks.
Conclusion
For any real-estate company in the UAE it is imperative to ensure compliance with AML regulations, not only will it help them prevent their business from being used to launder money, but it will also help them participate in making UAE the safest country on the world map.
Accounting and Auditing, being the top auditing firm in Dubai can help you implement a stringent anti-money laundering law framework. Our expert team is well-adjusted with all money laundering activities and can guide you on a journey to implement the best combating strategies in the market. To learn more about our services, please feel free to contact our team.