The Ministry of Economy (MoE) and the Ministry of Justice (MoJ), in partnership with the UAE Financial Intelligence Unit (FIU), 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 introduce such a mechanism for real estate transactions using virtual assets, which is 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 after numerous meetings and discussions between the Ministry of Finance, the Ministry of Justice, the FIU and other competent authorities of the UAE, including the Executive Directorate for Combating Money Laundering (AML) and Countering the Financing of Terrorism (CFT).
All real estate agents, brokers and law firms are required to submit reports to the FIU on real estate purchase and sale transactions in the UAE, which include any of the following three payment methods, whether for part or all of the value of the property.:
Single or multiple cash payment(s) equal to or exceeding 55,000 Dhs. Payments that include the use of a virtual asset. Payments in which the funds used in the transaction were received from a virtual asset.
The reporting mechanism requires real estate agents, brokers and law firms to obtain and register identity documents of the parties to the relevant transaction, among other relevant documents related to the transaction. The Rules apply to both individuals and legal entities that are parties to the above real estate transactions.
Relevant private sector organizations were informed of the specific requirements in regulatory circulars issued by the Ministry of Health and the Ministry of Justice. In addition, to ensure readiness, the UAE authorities jointly conducted three separate seminars with real estate agents and brokers, as well as law firms, helping them to familiarize themselves with new reporting requirements and improve their familiarization with the FIU's goAML system.
The Ministry of Justice and the Ministry of Justice play a key role in the UAE AML/CFT system as supervisory authorities for certain non-financial enterprises and professions (DNFBPs), including real estate agents, brokers and law firms, respectively. DNFBPs comprise a wide range of sectors that are primarily exposed to the risks of money laundering and the misuse of commercial transactions and the funds they trade for money laundering or other illegal activities, given the nature of the services they provide and the products they deal with. The Ministry of Finance and the Ministry of Justice apply a proactive, risk-based supervisory approach in accordance with UAE law and international standards established by the Financial Action Task Force (FATF).
Abdullah bin Tuq Al Marri, Minister of Economy, said that the adoption of the highest standards of transparency and governance, in addition to the necessary regulations to ensure economic and financial stability while combating abuses in the business community, are priorities of the Ministry of Economy and its partners in local, federal and private sector entities.
Al Marri noted that the real estate sector is one of the key sectors for investment and a vital basis for the economic development of the country. Therefore, he noted, the UAE strives to adopt procedures and rules that promote sound financial practices in the sector in accordance with the highest international standards. The new requirements concerning reporting rules in both the real estate and legal sectors ensure the development of their regulatory framework, leaving virtually no room for manipulation or illegal actions that can negatively affect the working environment, the economy and investments in these sectors, Al Marri continued.
Abdullah Sultan Bin Awwad Al Nuaimi, Minister of Justice, said: “The introduction of reporting rules for certain transactions in the real estate sector is another example of how the UAE coordinates the actions of the government and the private sector to strengthen the national system to combat money laundering and terrorist financing.”
He added: “By working closely to ensure a clear regulatory framework and effective reporting tools, the UAE can take swift action to protect the economy from known and emerging risks.”
For his part, Ali Faisal Baalawi, head of the UAE FIU, said: “These new measures will improve the quality of financial intelligence available to the FIU and will be used to track suspicious movements of funds or investments as part of our fight against money laundering and terrorist financing.”
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