The Ministry of Economy (MoE) and the Ministry of Justice (MoJ), in partnership with the UAE Financial Intelligence Unit (FIU), have announced the introduction of new reporting requirements aimed at certain real estate transactions conducted in the UAE.
The UAE is one of the first countries to implement such a mechanism for real estate transactions involving virtual assets, marking the latest example of the UAE’s sustainable and evolving approach to the global fight against money laundering and terrorist financing.
The decision was made following multiple meetings and discussions amongst the MoE, MoJ, FIU, and other competent authorities in the UAE, including the Executive Office for Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT).
All real estate agents, brokers, and law firms are obliged to file reports to the FIU for purchase and sale transactions of freehold real estate properties in the UAE that include any of the below three methods of payment, whether for a portion or the entirety of the property value: 1. Single or multiple cash payment(s) equal to or above AED 55,000 2. Payments that include the use of a virtual asset 3. Payments where the fund(s) used in the transaction were derived from a virtual asset.
The reporting mechanism requires real estate agents, brokers, and law firms to obtain and record the identification documents of the parties to the applicable transaction, among other relevant documents related to the transaction.
The rules apply to both individuals and corporate entities that are parties to the above real estate transactions. The relevant private sector entities have been informed about the specific requirements in regulatory circulators issued by the MoE and MoJ.
Additionally, to ensure preparedness, UAE authorities have collaborated to host three separate workshops with real estate agents and brokers, as well as law firms, helping to guide them through the new reporting requirements and enhance their familiarization with the FIU’s goAML system.
The MoE and MoJ play a key role in the UAE’s framework for AML/CFT as the supervisory authorities for designated non-financial businesses and professions (DNFBPs), including real estate agents and brokers and law firms, respectively.
DNFBPs include a wide range of sectors that are mostly exposed to the risks of money laundering and misuse of commercial transactions and the funds traded by them for the purposes of money laundering or other illegal practices, given the nature of the services they provide and the products they deal with.
The MoE and MoJ apply a proactive, risk-based supervisory approach in line with UAE legislation and the international standards set by the Financial Action Task Force (FATF).
