AML in the UAE: Latest Reporting Requirements for Real Estate Brokers & Agents
Real estate agents and brokers licensed in the UAE are required to meet new reporting requirements as per Circular Number 05/2022 issued by the Ministry of Economy (MOE). The new requirements are related to the Anti-money Laundering and Combatting Financing of Terrorism (AML-CFT), for which brokers and agents can consult with AML consultants in Dubai. As per the MoE circular, the real estate brokers and agents in the UAE need to report specified transactions pertaining to real estate in the new report named as Real Estate Activity Report (‘REAR’).
The new requirements have come into force from July 1st 2022 and real estate brokers and agents must ensure they have complied with the REAR requirements without fail. The MoE Circular has specified how real estate brokers and agents can comply with the REAR requirement in the UAE. This article is exclusively written to guide brokers and agents on the latest AML requirements concerning the REAR. Keep reading for further information:
Who is Required to File a Real Estate Activity Report?
Real estate brokers and agents licensed in the UAE are required to file the REAR effective from July 1st 2022. They need to report the transaction related to the purchase/sale of Freehold Real Estate, which involves cash or virtual assets. AML consultants in Dubai can help brokers and agents to file the REAR without fail.
When to File the Real Estate Activity Report?
Real estate agents and brokers need to file the REAR in the UAE only in the following transactions:
- Purchase and sale transactions of Freehold real estate, according to the description and determination of the law of each emirate, in carrying out any single physical cash transaction or several transactions equal to or exceeding AED 55,000 for the entire, or a portion, of the property value
- Purchase and sale transactions of Freehold real estate where the method of payment is a virtual asset for a portion or the entire property value
- Purchase and sale transactions of Freehold real estate where the funds used to carry out the transaction were converted from or to a virtual asset for a portion or the entire property value
What are the Obligations of Real Estate Brokers & Agents under the REAR?
If they are dealing with any of the transactions listed in the MoE Circular, the real estate agents and brokers must meet certain mandatory obligations. AML consultants in Dubai can advise the agents and brokers on the requirements. The real estate agents and brokers need to meet the following obligations:
- Obtain and record identification documents (Emirates ID, or Passport copy)
- Obtain and record receipts, invoices, contracts and Purchase & Sale Agreement.
- Submit the REAR via the Financial Intelligence Unit’s (“FIU”) goAML platform
Documentation Requirements when the Buyer/Seller is a Legal Person
Real estate agents need to obtain certain documents to file the REAR. If the buyer or seller is a legal person, the following identification documents must include the following:
- Trade License
- Articles of Association
- Register of Beneficial Owners
- Emirates ID or passport copy for all Beneficial Owners
- Emirates ID or passport copy for all shareholders/partners
Documentation Requirements when the Buyer/Seller is a Natural Person
If the buyer or seller is a natural person(s), identification documents must include the following:
- Valid Emirates ID
- Passport copy
How Long Should you Maintain the Records?
Apart from obtaining the identification documents, real estate brokers and agents in the UAE are required to maintain them as well. As per the MoE Circular, the records of all documents and the information related to the transactions must be kept for at least five years. AML consultants in Dubai can help businesses comply with the record-keeping requirements for filing the REAR.
Other Mandatory Requirements for the Real Estate Agents & Brokers
Being one of the Designated Non-Finance Businesses and Professions (DNFBPs), the real estate agents and brokers are already obliged to comply with certain critical AML-CFT requirements in the UAE. However, submissions of REARs do not exempt them from their existing AML-CFT obligations to submit the following types of reports via goAML:
- Suspicious Transaction Report (STR)
- Suspicious Activity Report (SAR)
- Funds Freeze Report (FFR)
- Partial Name Match Report (PNMR)
- High-Risk Country Report (HRC)
- High-Risk Country Activity Report (HRCA)
Consult with the Best AML Consultants in Dubai, UAE
As mandated by the UAE authorities, Real Estate Brokers and Agents need to submit the REAR on the three types of transactions stated in the MoE Circular. This means they should have a policy in place to identify such transactions and report the same on time, for which the assistance of AML consultants in Dubai such as Jitendra Chartered Accountants (JCA) may come in handy. JCA can help you understand the new reporting requirements in detail, guide you around the identification of such transactions, and also, assist in the filing of the REAR. Our other AML services in Dubai include:
- AML Risk Assessment specific to the industry
- Implementation and review of effective AML/CFT policies & procedures
- Advice on staffing requirements for AML/CFT department
- Assistance with staff awareness training
- AML Penalty Appeal Services in the UAE