Compliance and Anti-Money Laundering in the UAE

Compliance and anti-money laundering in the UAE is not a matter for banks alone. A gold shop, a real estate brokerage, an accounting firm and a corporate services provider are all businesses the law requires to register with their supervisor, know their customers, report suspicious transactions and keep records. The direct answer is that a business is judged on its procedures, not its intentions: a business that has not registered or has not asked for a customer’s ID can face a heavy fine even when no money laundering has taken place.

This guide sets out compliance obligations in the order a business actually meets them: whether it is covered at all, who supervises it, what it must do day to day, what happens at an inspection or when a fine is imposed, and when an administrative file turns into a criminal case.

All the articles in this area are gathered in the Compliance and Anti-Money Laundering category, and AWADH ALMHEIRI LAW FIRM AND LEGAL CONSULTATIONS helps businesses in Dubai and across the other emirates build their compliance framework, respond to supervisors and defend themselves before the courts.

What does anti-money laundering compliance mean?

Compliance is the set of measures the law imposes on specific businesses so that they are not used to bring illicit funds into the economy: registering with the supervisor, assessing risk, verifying customers and beneficial owners, reporting suspicion, applying sanctions lists and keeping records.

These obligations are separate from the money laundering offence itself. Money laundering requires knowledge that the funds are the proceeds of crime, whereas a compliance breach arises from the failure to follow the procedure alone, and carries administrative fines that can run into millions.

Is your business a “designated non-financial business or profession”?

Alongside banks, exchange houses, insurers and virtual asset service providers, the law covers a group known as designated non-financial businesses and professions. The main ones are dealers in precious metals and stones, real estate brokers and agents, accountants and auditors, corporate and trust service providers, and lawyers and notaries when they carry out certain financial or property transactions on behalf of clients.

What matters is the nature of the activity, not the form of the licence or the size of the business. A small jewellery shop selling for cash, or a real estate broker working alone, is subject to the same obligations as a large establishment.

Who supervises your business?

The supervisor depends on the activity. The Ministry of Economy and Tourism supervises most designated non-financial businesses, such as gold dealers, real estate brokers, accountants and corporate service providers; the Ministry of Justice supervises lawyers and notaries; the Central Bank of the UAE supervises financial institutions; and the Dubai International Financial Centre and Abu Dhabi Global Market have their own supervisors.

The Financial Intelligence Unit receives reports through the goAML system, while the National Committee for Combating Money Laundering sets policy and coordinates between authorities. Knowing your supervisor is the first step, because it is the one that inspects, imposes the fine and hears the objection.

goAML registration: the step many overlook

A covered business cannot report a suspicious transaction or file the periodic reports required of it unless it is registered on goAML. Many businesses discover they are not registered at their first inspection and face a violation in its own right, even if they have never carried out a suspicious transaction.

More seriously, carrying on a covered activity without registration with the supervisor is punishable as a crime under the new law, not only administratively. Every compliance review therefore starts by checking the registration and updating its data.

Risk assessment, internal policies and the compliance officer

Every covered business must identify, assess and document in writing the money laundering risks in its activity, adopt internal policies and procedures approved by management and applied across all branches, appoint a compliance officer and train its staff.

These documents are the first thing an inspector asks for. A common mistake is to buy a ready-made policy template that does not reflect the actual business, so that what is written contradicts what happens in practice and the template itself becomes evidence of the violation.

Customer due diligence: know your customer and who stands behind them

A business must verify the customer’s identity before dealing with them in the cases set by law, such as the start of a continuing business relationship, a cash transaction reaching the prescribed threshold, or any suspicion however small the amount. If the customer is a company, a copy of its trade licence is not enough: you must reach the beneficial owner, the natural person who actually owns or controls it.

Due diligence is applied according to risk: enhanced due diligence for high-risk customers such as politically exposed persons or customers from high-risk countries, and simplified due diligence for low-risk customers where there is no suspicion. Splitting a transaction into small invoices to avoid asking for ID is one of the first things an inspector looks for.

Suspicious transaction reporting and the ban on tipping off

Whenever there are reasonable grounds to suspect that funds are the proceeds of crime, the Financial Intelligence Unit must be informed without delay through goAML, whatever the value of the transaction, and customer confidentiality cannot be invoked. The law prohibits the business and its staff from alerting the customer that a report has been made.

In return, the law protects anyone who reports in good faith from liability. Failing to report wilfully or through gross negligence, however, is an offence in its own right, not merely an administrative breach.

Targeted financial sanctions and terrorism lists

A covered business must screen its customers and counterparties against local sanctions lists and the UN Security Council lists, freeze funds immediately if a name appears on them, and then notify the competent authority. Screening once when the file is opened is not enough; list updates must be followed.

Breaching targeted financial sanctions instructions is among the offences punishable by imprisonment and a fine, so the business needs a documented screening process that records the date and result of every check.

Gold and jewellery dealers: the most closely supervised sector

The gold and precious metals sector in the UAE is among the most inspected, because gold is easy to move and convert into cash. A gold dealer must apply due diligence to cash transactions reaching the prescribed threshold and file dealers in precious metals and stones reports through goAML, in addition to reporting suspicion and keeping records.

The same mistakes recur in this sector: splitting invoices, accepting cash from someone other than the registered buyer, relying on a company’s licence without reaching the beneficial owner, and selling bullion for cash without filing any report.

Real estate brokerage and virtual assets

Real estate brokers are subject to compliance obligations in property sales and purchases, especially when the price is paid in cash, in virtual assets or from sources that are hard to trace. The broker must know who the real buyer is and where the money comes from, not settle for a copy of a passport.

Virtual asset platforms are subject to separate licensing and supervision, and dealing with an unlicensed platform opens the door to fraud and makes it harder to recover funds later.

Inspections and administrative fines: how to respond

An inspection usually begins with a notice requesting the policies, the risk assessment, the compliance officer’s appointment, a sample of customer files and proof of registration. The first rule is to submit what you have as it is and never create backdated documents: providing false information is a separate offence more serious than the original violation.

An administrative fine is a decision that can be objected to and challenged before the competent court within the prescribed deadlines. Many decisions rest on formal, curable violations, and immediate correction, proof of good faith and no repetition all weigh in favour of mitigation. A late objection makes the decision final.

When a compliance file becomes a criminal case

A file moves from administrative to criminal in specific situations: carrying on the activity without registration, wilfully or grossly negligently failing to report, tipping off the customer, providing false beneficial-owner information, breaching sanctions instructions, or an accusation of money laundering itself. The manager of the business may be personally liable alongside the company.

At this stage the investigation is usually accompanied by a travel ban and frozen accounts, so the accused needs a lawyer at the investigation from the very first moment, because what is said there is hard to undo later.

The bank has frozen or closed my account for compliance reasons

Many individuals and companies meet compliance from the other side: a bank asking for documents on the source of funds, holding a transfer, freezing an account or closing it without explanation. The bank is bound to apply due diligence, but that obligation does not mean your money can stay blocked without legal basis.

The right course is to answer the bank in writing with organised documents explaining the source of the funds and the nature of the business. The Sanadak unit hears customer complaints against banks, but it may decline a complaint that relates essentially to the bank’s anti-money laundering policies, in which case the route is the competent court. If the freeze was ordered by the Public Prosecution or a supervisor, the route is different and requires an objection before the authority that issued it.

Compliance and anti-money laundering in Dubai

Dubai is the centre of the country’s gold, real estate and company business, so most inspections of designated non-financial businesses take place there, in Deira and the Gold Souk, the Dubai Multi Commodities Centre and the free zones. Anyone looking for an AML compliance lawyer in Dubai needs someone who combines both sides: building the file before the inspection, and defending the business before the supervisor, the prosecution and the courts if a violation occurs.

What to prepare before consulting a compliance lawyer

How to verify a lawyer’s licence in Dubai

A lawyer appearing before the Dubai Courts must be enrolled with the Government of Dubai Legal Affairs Department, and you can check the enrolment through the Department’s website. Federal Decree-Law No. 34 of 2022 regulates the legal profession and legal consultancy and distinguishes between law firms licensed to appear before the courts and consultancy offices that may not, which matters if your file may reach the prosecution or the court.

Legal references

Frequently asked questions about compliance and anti-money laundering in the UAE