2. The real estate industry in the UAE is one of the most sensitive non-financial industries to
money laundering. The absence of openness and understanding of AML requirements
historically means that money laundering risks have proliferated and grown with the
industry’s growth. Thus, money laundering through real estate remains a major attraction
for fraudsters.
Authorities are taking steps to make the sector more monitored. However, it is finally up to
companies in the sector to ensure that they are complying with regulations. Using
competent AML consultants in Dubai, such as HLB HAMT, can ensure that firms are
adhering to AML regulations, which will create an additional layer to handle potential
issues and protect AML compliance for companies in the UAE.
3. MONEY LAUNDERING PRACTICES
Criminals’ exploitation of the real estate sector has wide-ranging negative consequences
for national security. The following strategies have been recognised as being employed
by scammers.
Hiding the illicit origins of funds
Exposure to a precise financial flow system is limited
Ease of conducting business with brokers in the massive real estate market
Fabrication of a property’s evaluation or value
Complex loans or credit finance are used
Taking advantage of the wealth derived from real estate to benefit criminals
4. Use of Non-financial experts (such as real estate and legal experts)
Keeping the identity of the beneficial owner or owners hidden or masked
Use of Corporate vehicles
Making unneeded upgrades and enhancements to a property on a regular basis
Using trusts and other business structures like shell corporations, or front firms to
conceal possession
Use of assistance of a variety of other professions in order to hide their assets and
avoid discovery
5. SEVEN CRITERIA TO RECOGNIZE THE
POTENTIAL MONEY LAUNDERING RISKS
Successfully establish customer due diligence and continuous monitoring methods
that are risk-based.
Create and record rules and processes to lower the probability of money laundering.
Create a solid AML/CFT structure, such as establishing a Compliance Officer.
Be mindful of the size, complexity, integrity, regional sources, or any exceptional
aspect of financial arrangements or instruments used in the purchase and sale of real
estate.
Be completely conscious of risks as well as the time period during which the danger of
money laundering is highest.
Mysterious activities should be identified and reported.
Brokers and agents must have clear knowledge on the sort of real estate transaction
that a customer is involved in.
6. PERFORM STRATEGIES FOR CUSTOMER
DUE DILIGENCE
Depending on the categorization and assessment of the risk, real estate brokers, and
developers must implement the relevant customer due diligence (CDD) steps.
Ascertain that the customer’s profile is suitable with the real estate transaction’s
parameters.
Stay updated for any connections to Political Exposed Persons (PEPs), mainly in the
presence of overseas market participants.
You must keep a close eye on your client’s beneficial owner’s identification and gather
all essential documentation.
You should have a set procedure in place for screening consumers and run security
checks.
You must take account of the legal contract or framework utilised in the trade, as it
may lead in the owner’s or source of funds’ identity being concealed.
7. Although the degree and scope of the dangers presented by the real estate sector and
the Licensed Financial Institutions (LFI) differs, they do have some basic traits that
LFIs should be aware of and consider.
Once you find potential risk consumers, you must monitor their transactions on a
frequent basis. You should keep track of how often and what kind of deals they have
done.
Adopting reliable and accurate internal procedures, restrictions, and processes are
some of the most important steps. You must evaluate the success of these policies and
make any updates as needed. Any questionable activities must be reported to the
Financial Intelligence Unit as soon as you detect them. You must enter and maintain all
the critical data for the alleged transaction.
8. ASSISTANCE OF HLB HAMT
The real estate industry plays a significant role in the UAE’s economy. As a result,
preventing money laundering is vital. By implementing AML measures with the
assistance of expert AML consultant, you will be able to protect your business from
any unlawful activity or business connection, as they will be adequately prepared with
the correct, essential anti-money laundering controls.
9. CONTACT US
HLB HAMT
Level 18, City Tower-2,
Sheikh Zayed Road
PO Box 32665
Dubai – United Arab Emirates.
Tel: +971 4 327 7775
E-mail: dubai@hlbhamt.com
