For transactions involving virtual assets
New requirements for reporting on real estate transactions in the UAE
«Economy»: The new requirements limit illegal practices.
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The Ministries of Economy and Justice announced the introduction of new requirements for preparing reports related to some real estate transactions in the UAE, in partnership with the Financial Information Unit.
The UAE is one of the first countries in the world to implement this mechanism for real estate transactions that involve virtual assets, which confirms the country's continued efforts to achieve sustainability and prosperity by strengthening complementary relations with all countries to counter money laundering crimes and combat the financing of terrorism.
This decision was taken, after meetings and discussions that took place between the Ministry of Economy, the Ministry of Justice, the Financial Information Unit, the Executive Office for Combating Money Laundering and Terrorist Financing, and a number of concerned authorities.
real estate agents
As of July 1, 2022, all real estate agents, brokers and law firms are required to submit reports to the Financial Information Unit regarding purchase and sale transactions of freehold real estate properties in the UAE, which include any of the following three payment methods, whether for the whole or part of the property value. :
1. A cash payment, single or multiple, equal to or greater than 55 thousand dirhams.
2. Payments that include the use of virtual assets.
3. Payments that were primarily derived or transferred from a virtual asset.
Reporting mechanism
The reporting mechanism by agents, real estate brokers and law firms requires obtaining all documents related to the transaction, and recording the identity data of the parties to the applicable transaction, in addition to any other relevant documents.
These conditions apply to all real estate transactions mentioned above, whether the parties to the transaction are individuals or legal entities.
The relevant authorities in the private sector were informed of the specific requirements in the regulatory and specialized bulletins issued by the Ministry of Economy, the Ministry of Justice and the Financial Information Unit.
In the interest of the concerned authorities to spread awareness of the latest update and notify the target groups of the new procedures, three separate workshops were organized with real estate agents and brokers, in addition to law firms, to help them understand the new reporting requirements and enhance their knowledge of the FIU's goAML system.
The Ministry of Economy and the Ministry of Justice play a major role in combating money laundering and terrorist financing crimes in the UAE, as they are supervisory authorities on designated non-financial businesses and professions, including real estate agents, brokers and law firms.
DNFBPs include a wide range of sectors most exposed to the risks of money laundering and misuse of commercial transactions, and funds that are traded for the purposes of money laundering or other illegal transactions, due to the nature of the services they provide and the products they deal with.
Transparency Standards
The Minister of Economy, Abdullah bin Touq Al-Marri, said that “adopting and applying the highest standards of transparency and governance and setting the necessary controls to ensure economic and financial stability and combat all illegal practices within the business environment is a priority that the Ministry of Economy is working on in cooperation with its partners from the federal and local authorities and the private sector.”
Bin Touq added, “The real estate sector represents one of the most important investment sectors and an important source of economic growth for the state, and from this standpoint, the state is working to adopt procedures and regulations that will enable the best sound financial practices for this sector and in accordance with the best international standards.
The new requirements regarding the reporting rules for the real estate and legal sectors come to ensure the strengthening of the frameworks for their regulation, and the reduction of any manipulations or illegal practices that would harm the work environment, and the economic and investment climate in these sectors.”
For his part, the Minister of Justice, Abdullah bin Sultan bin Awad Al Nuaimi, said that “the introduction of rules for reporting certain transactions in the real estate sector reflects the strong strategic cooperation between the public and private sectors, in order to strengthen the national framework to counter money laundering and combat the financing of terrorism by providing a clear regulatory framework.” And effective reporting tools so that the UAE can take quick measures to protect the economy from known and emerging risks.”
financial information
Head of the Financial Information Unit, Ali Faisal Baalawi, said: “These new procedures will improve the quality of financial information available to the Financial Information Unit, and will be used to track the movement of suspicious funds or investments as part of our tireless efforts to combat money laundering and terrorist financing.
Most importantly, these requirements increase the stability and safety of the real estate sector in the UAE and provide all stakeholders with more transparency in a sector that is a major contributor to the country’s economy.”
• Real estate agents, brokers and law firms must submit reports to the Financial Information Unit.
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