Anti-money laundering in Dubai isn’t a practice but a legal requirement to protect the financial and business operations across the UAE. This rule is governed by Federal Decree Law No. 20 of 2018, and the rules are implemented under Cabinet Decision No. 10 of 2019.

The AML framework in Dubai covers a wide array of businesses, both financial and non-financial. This article will explain what AML is in Dubai, why it matters, what the key compliance requirements are, what AML compliance services typically include, how such compliance applies to real estate businesses, and provide a rough overview of potential costs for small banks, finishing with a FAQ section to answer common questions.

What is Anti-Money Laundering in Dubai?

Anti Money Laundering in Dubai means the set of rules, laws, and institutional framework that is used to protect, detect, and penalise financial crimes. These financial crimes include money laundering, terrorist financing, and illegal financial flows. The principal legal foundation is Federal Decree-Law No. (20) of 2018, which criminalizes money laundering and financing of terrorism.

The law is implemented with its executive regulation, which is Cabinet Decision 10 of 2019. It clarifies obligations for financial institutions and non-financial businesses. Under this legal framework, the firms defined as Designated Non-Financial Businesses and Professions must follow the AML/ CTF obligations.

You will need to register on the official reporting platform, goAML, if you want to follow the rules. goAML is also used by the UAE Financial Intelligence Unit to collect, analyse suspicious transaction reports from different firms.

What is the Importance of AML Compliance in Dubai ?

Protecting the Financial System & Economy: Dubai is a global financial and business hub. The effective AML rules will help the prevention of its financial system from criminals. Criminals are looking to launder money or finance terrorism. Ultimately, it will protect the stability and reputation of the UAE economy.
Upholding International Standards: The AML rules and framework in the UAE are managed with the standards set by the international body called the Financial Action Task Force.
Safeguarding Business Reputation and Investor Confidence: Any business that is operating in Dubai must comply with the rules. Better compliance helps to win the trust of clients, partners, and investors. However, if you are unable to follow the compliance, there is a major risk of damage to your reputation and loss of license.
Avoiding Legal Penalties and Enforcement Action: Firms that fail to follow the AML obligations will face fines, sanctions, and criminal liability.
Maintaining the UAE’s Global Standing: Dubai is the global trade and investment center. Therefore, it should follow the strong AML framework, which makes sure it remains attractive to international investors.

What is the Key Requirements for AML Compliance in Dubai ?

Regulated firms in Dubai must follow the AML framework, which even includes DNFBPs. There are some key compliance measures along with requirements. They are:

Risk-Based Approach (RBA): The companies should be aware of the risks with clients, business, transactions, high-risk jurisdictions, products, and services, and make their AML rules accordingly.
Customer Due Diligence (CDD) / Know Your Customer (KYC): The firms must check the identity of the clients or customers before starting a business.
Enhanced Due Diligence (EDD): For high-risk customers — for example, politically exposed persons (PEPs), clients from high-risk jurisdictions, or clients engaging in high-value transactions — enhanced due diligence is required.
Identification of Ultimate Beneficial Owners (UBOs): It is compulsory to identify the real beneficial owners behind corporate clients or structures. It is more important, especially in sectors like real estate or company services.
Registration on goAML & STR Reporting: Companies must register at the goAML platform. Furthermore, they must report any Suspicious Transaction Reports whenever issues about illegal activity arise.
Internal AML Policies & Procedures: There must be clear AML policies and processes for the business. They should appoint a Money Laundering Reporting Officer who can maintain the confidentiality of reports. Moreover, they should also make sure that the staff are well-trained.
Ongoing Monitoring & Record-Keeping: There should be continuous monitoring of transactions and retention of records to check for suspicious patterns or transactions over time.

What Does an AML Compliance Service Include?

Businesses that are set up in the UAE, which originally don’t focus on outsourcing or seeking expert AML service, can go for AML compliance service providers in the UAE. The services offered are:

AML Compliance Consultation: We advise on the applicable laws and regulations. Similarly, we also guide businesses on how to structure themselves for compliance.
In-house AML Compliance Department Setup: The service also includes establishing an internal compliance function, like the appointment of an AML compliance officer, money laundering reporting officer, etc.
KYC (Know Your Customer) / Due Diligence: Verifying the customer identities, beneficial ownership, source of funds, background checks, and assessment of business relationship
Enhanced Due Diligence (EDD): There will be additional checks for high-risk customers about their source of funds, background, PEP status, and ownership.
AML/CTF Policy and Manual Development: It is important to draft AML policies. procedure manuals, internal controls, and compliance guidelines, which are related to business type and risk profiles.
Employee AML Training: It includes training staff about the AML laws, KYC/EDD procedures, reporting obligations, screening of sanctions, and suspicious transactions of red flags.
AML/CFT Audit and Independent Review: The service also focuses on conducting periodic compliance audits, independent reviews so that there is compliance for regular inspection.
AML Software Consultancy and Transaction Monitoring: We also advise and integrate AML compliance software tools, automated transaction monitoring systems, record keeping, and risk monitoring.
AML Customer Risk Assessment and Compliance Agent Services: Proper profiling of the customers based on risk, customer registers, ongoing monitoring, and compliance agent if required.

Such services address core compliance needs: compliance issues, high-risk customers, risk profiling, background checks, beneficial owner verification, transaction data monitoring, reporting, audits, and regulatory adherence.

What is the AML Compliance for Real Estate Businesses in Dubai ?

Real estate businesses in Dubai are among the DNFBP categories covered by the AML legislation. Because real estate deals often involve large sums of money, complex ownership structures, and potential for anonymity, the risk of money laundering is high. Real estate firms must follow AML rules, which include:

Risk-Based Approach, CDD/KYC, EDD: In this approach, we verify the identity of the buyers, determine ultimate beneficial owners, check their source of funds, and also verify their ID or passport. This helps us to assess the risk of the profiler.
Source-of-Funds & Wealth Verification: It is important to be sure that the funds being used for a real estate transaction are valid. They shouldn’t be the ones derived from criminal activity.
Sanctions Screening & Compliance Officer Appointment: A proper study of the clients against the sanction list must be done. It is also important to appoint a compliance officer to see whether AML rules have been followed or not.
Registration on goAML & Reporting Suspicious Transactions: Real estate companies in the UAE are required to sign up on the goAML platform. Likewise, they should also alert the FIU whenever they come across any activity that looks suspicious or may be linked to wrongdoing.
Record-Keeping and Documentation: Firms must keep clear and organized records of who their clients are. Firms should know who ultimately owns the property, details of the transactions, and proof showing where the funds have come from.

What is the Estimated Costs of AML Compliance for Small Banks in Dubai ?

Cost Component	Description / What it Covers
Technology / Software / RegTech	Automated transaction monitoring systems, sanctions screening tools, compliance software, and goAML integration.
Operational Costs	It focuses on data collection, record keeping, reporting staff timings, etc
Personnel (Compliance Staff)	We focus on hiring compliance officers, MLROs, analysts, and also help with professional development.
Training	Providing regular AML training for the staff, along with updating their knowledge based on rules.
External Audits & Independent Reviews	It includes hiring auditors outside the company for things like AML/CFT audits and risk assessments.
Policy Formulation & Documentation	It is important to focus more on creating AML policies, manuals, compliance checklists, etc.
Regulatory & Advisory Fees	The fees cover things like consulting, filing with the government, registering, and giving proper advice.

Frequently Asked Questions (FAQ)

What is Anti-Money Laundering (AML) in Dubai?

→The set of laws which is used to stop, find and punish money laundering is called Anti Money Laundering in Dubai. The basis of this framework is Federal Decree Law No. 20 of 2018 and Cabinet Decision No. 10 of 2019. Moreover, it requires both financial institutions and non-financial institutions to follow the rules like customer due diligence, suspicious transaction reporting, record keeping, etc.

Why is AML Compliance important in Dubai?

→AML compliance is important in Dubai because it protects the UAE’s financial system and its integrity. It protects the financial system from criminal exploitation, illegal businesses, etc. Further AML rules help to win the investors’ confidence.

Which industries in Dubai/UAE require AML compliance?

→The rule of AML is applied to different industries. Besides the traditional financial institution, it is applied to non-financial sectors called DNFBPs. DNFBSPs include real estate agents, developers, dealers in precious metals, stones, auditors, accountants, and other professionals defined under law.

What services are included in AML compliance solutions in Dubai?
→AML compliance services typically include AML compliance consultation, setting up in-house compliance departments, KYC / Customer Due Diligence, Enhanced Due Diligence (EDD), AML/CTF policy and manual development, employee training, AML/CFT audits and independent reviews, AML software consultancy and transaction monitoring, customer risk assessment, beneficial ownership verification, and compliance agent services.

What is KYC (Know Your Customer) in AML compliance?
→KYC (Know Your Customer) is the process of verifying the identity of clients or customers, understanding their business or purpose, and confirming their legitimacy before establishing a business relationship. Before performing massive transactions business needs to:

Collect and verify identity documents
Check beneficial ownership
Understand the source of funds or wealth
Proper assessment of risk

Conclusion

There is no option in Dubai other than following the Anti Money Laundering rule. Anti Money Laundering is created to cover a broad range of financial and non financial business houses. Federal Decree Law No 20 of 2018 and Cabinet Decision No 10 of 2019 for AML rules work together to form the primary legislation.

A framework is set out by both parties to fight money laundering, terrorist financing, and illegal activities. Being a financial institution, you will need to implement risk-based procedures, KYC/EDD, internal policies, transaction monitoring, and reporting through goAML or the UAE FIU.

As the global issues of financial crimes are increasing, having strong AML rules and regulations is important for everyone to follow.