UAE Issues Requirements to Cut Down on Possible Crypto Real Estate Money Laundering
The UAE has introduced new reporting requirements for “certain real estate transactions” conducted in the country to fight money laundering and terrorism financing.
As part of the latest directive, all real estate agents, brokers and law firms are required to file reports to the Financial Intelligence Unit on the purchase and sale transactions of freehold properties that involve three methods of payment, whether for a portion or the entirety of the property value.
In fact, payments for real estate transactions done through virtual assets, single or multiple cash payments equal to or above AED 55,000, and payments where the fund(s) used in the transaction have been derived from a virtual asset will now be subjected to additional reporting to authorities.
The decision was made following several meetings and discussions among the Ministry of Economy, the Ministry of Justice, the FIU and other relevant authorities in the UAE, including the Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism.
It makes UAE one of the first countries to implement such a mechanism for real estate transactions involving virtual assets, and shows the country’s evolving approach to the global fight against money laundering and terrorist financing.
Ali Faisal Ba’Alawi, 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 trace the suspicious movement of funds or investments as part of our fight against money laundering and terrorism financing.
“Importantly, the requirements further strengthen the stability and integrity of the UAE’s real estate sector and provides all stakeholders with greater transparency in a sector that is a key contributor to the UAE’s economy.”
Abdulla bin Touq Al Marri, Minister of Economy, said the adoption of the highest standards of transparency and governance, in addition to the necessary regulations to ensure economic and financial stability while combating malpractice within the business community, are priorities of the Ministry of Economy and its partners in local, federal, and private sector entities.
Abdullah Sultan Bin Awwad Al Nuaimi, Minister of Justice, added: “The introduction of reporting rules for certain transactions in the real estate sector is another example of how the UAE is coordinating across the government and with the private sector to strengthen the national framework for anti-money laundering and countering the financing of terrorism.”
The new requirements, which apply to both the real estate and legal sectors, aim to “ensure the development of their regulatory frameworks, leaving little or no room for manipulation or illegal practices that could negatively impact the work environment and the economy and investment within these sectors”, Mr bin Touq said.
The UAE has strict laws to prevent money laundering as well as the financing of terrorism. The country has consistently issued regulations over the years to clamp down on financial crime.
Last year, the country established the Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism, an agency to deal with money launderers, organisations and people suspected of financing terrorists and organised crime.
In November 2020, the Ministry of Economy set up a new anti-money laundering department to ensure that all non-financial businesses and professionals comply with local laws.
The Central Bank of the UAE has also been penalising exchange houses operating in the country for failing to achieve the appropriate levels of compliance with anti-money laundering regulations.