AML-CFT Compliance in the UAE: Reporting Requirements for Real Estate Brokers & Agents
To combat money laundering and the financing of terrorism, the Ministry of Economy (MOE) in the United Arab Emirates (UAE) introduced Circular Number 05/2022. This circular has ushered in a new era of reporting requirements for licensed real estate brokers and agents, mandating their adherence to Anti-Money Laundering and Combatting Financing of Terrorism (AML-CFT) protocols. Under this directive, a pivotal component emerged—the Real Estate Activity Report (REAR).
Previously effective as of July 1, 2022, real estate professionals in the UAE are expected to diligently comply with the REAR requirements outlined in the MOE Circular. These requirements have been carefully designed to help identify and report specific real estate transactions susceptible to potential AML-CFT risks.
Who Must File a Real Estate Activity Report?
Licensed real estate brokers and agents operating in the UAE are now obligated to file the REAR. This obligation extends to transactions involving the purchase or sale of Freehold Real Estate that incorporate cash or virtual assets as part of the transaction.
When to File the Real Estate Activity Report?
The REAR must be filed in the UAE in the following instances:
Purchase and Sale Transactions of Freehold Real Estate: This includes transactions exceeding or equaling AED 55,000 in value, whether through a single physical cash transaction or a series of transactions.
Virtual Asset Payments: Transactions involving the purchase and sale of Freehold real estate with virtual assets, either partially or entirely, are also subject to REAR reporting.
Conversion of Funds to Virtual Assets: When funds are converted from or to virtual assets as part of a Freehold real estate transaction, the REAR must be submitted.
Obligations of Real Estate Brokers & Agents under the REAR
For transactions covered by the MOE Circular, real estate agents and brokers are required to fulfill specific obligations:
Identification Document Verification: Obtain and record identification documents, such as Emirates IDs or Passport copies, from all involved parties.
Document Retention: Document and retain receipts, invoices, contracts, and Purchase & Sale Agreements related to the transactions.
REAR Submission: Submit the Real Estate Activity Report via the Financial Intelligence Unit’s (FIU) goAML platform to ensure compliance.
Documentation Requirements for Legal and Natural Persons
Depending on whether the buyer/seller is a legal or natural person, specific documentation is required:
Legal Person:
– Trade License
– Articles of Association
– Register of Beneficial Owners
– Emirates ID or passport copies for all Beneficial Owners
– Emirates ID or passport copies for all shareholders/partners
Natural Person(s)
– Valid Emirates ID
– Passport Copy
Record Retention Duration
Records of all documents and transaction-related information must be maintained for a minimum of five years, as stipulated by the MOE Circular.
In addition to REAR submissions, real estate agents and brokers, as Designated Non-Finance Businesses and Professions (DNFBPs), must uphold existing AML-CFT obligations. These include reporting Suspicious Transaction Reports (STR), Suspicious Activity Reports (SAR), Funds Freeze Reports (FFR), and Partial Name Match Reports (PNMR) through the goAML platform.
At Spicer Pegler, we understand the evolving landscape of AML-CFT compliance in the UAE. Our team of experts is well-equipped to assist real estate professionals in meeting their reporting requirements. We offer comprehensive support to ensure your compliance with the REAR and other AML-CFT obligations. Stay compliant and secure with Spicer Pegler.