Ministry of Economy obligates real estate brokers & agents in the country to maintain records & transactions data for at least five years

Safia Al Safi: The Ministry is keen to enable sound financial practices and confront money-laundering crimes in the real estate sector in a way that enhances its ability to attract safe & sustainable investment

• New rules applicable to all real estate agents and brokers registered in the UAE starting from the beginning of July 2022

- The UAE Ministry of Economy (MoE) issued a circular obligating real- estate brokers and agents registered and licensed in the UAE, including those in free trade zones, to maintain their records and transactions data for a period of no less than five years. The Ministry explained that the move forms part of its supervisory and regulatory role over the designated non-financial businesses and professions (DNFBP) sector in accordance with the UAE’s anti-money laundering and countering the financing of terrorism (AML/CFT) legislation, in a manner that enhances the national economy’s status and its positive reputation in various global markets. In addition, the Ministry added that the circular is in accordance with the provisions of the Executive Regulations of Federal Decree Law No. (20) of 2018 and its amendments regarding countering money laundering crimes, combating terrorism financing and the financing of illegal organizations, which stipulate setting guidelines, regulations, and related measures to confront crime among those subject to its control when necessary.

In this regard, H.E. Abdullah Sultan Alfan Al Shamsi, Assistant Undersecretary for Monitoring and Follow Up at the Ministry of Economy, said: “The real estate sector is one of the main drivers of economic growth in the country. According to the results of the national risk assessment, this vital sector is one of the high-risk sectors. Therefore, the Ministry is keen to enable the financial best practices, prevent financial crimes and forms of money laundering practices within the activities of real estate agents and brokers in the country. These efforts are also aimed at raising their awareness on the importance and correct methods of compliance with anti-money laundering legislation and requirements. Such measures enhance the sector’s ability to attract safe and stable investment and help drive sustainable development in the country in line with international best practices and standards issued by the Financial Action Task Force (FATF), and consolidates the UAE’s position as a leading global destination for investment and business.”

The Ministry held a training workshop in cooperation with the Financial Information Unit for the real estate agents and brokers to educate them on how to submit real estate activity reports and explain various types of money laundering in the real estate sector. The session also taught them how to identify warning signs that real estate agents and brokers may come across in their line of work.

Safia Al Safi, Director of the Anti-Money Laundering Department, Ministry of Economy, said: “The Circular on the new procedures to be followed by the country’s real estate sector will come into effect this July. It will play a pivotal role in identifying the work mechanisms of real estate brokers and agents registered in the UAE, thanks to their significant contributions to attracting real estate investments and investors from all over the world. The Circular also regulates the sector’s work mechanisms and helps monitor its activities. In this respect, the Ministry will continue its efforts to strengthen the regulatory frameworks of the system of anti-money laundering and combating the financing of terrorism in the UAE across all sectors, particularly in the DNFBP sector, in accordance with international best practices and in collaboration with the Ministry’s local and global partners.”        

The Circular stipulates the procedures to be followed by real estate brokers and agents registered in the UAE while conducting real estate sale, purchase and brokerage, including the following:  

• Real estate brokers and agents are required to register and document ID documents, namely Emirates ID or passport copy, as well as register and document information and data pertaining to the receipts, contracts and sale and purchase agreement, and submit real estate activity report (REAR) via the Financial Intelligence Unit’s digital “goAML” platform in three cases:
• Case 1: Upon conducting freehold properties’ sale and purchase transactions, as described and determined in each emirate’s law, for single or multiple cash transactions amounting to or exceeding AED 55000 for the property’s entire value or part thereof.
• Case 2: Upon conducting freehold properties’ sale and purchase transactions when the method of payment is virtual assets for the property’s entire value or part thereof.
• Case 3: Upon conducting freehold properties’ sale and purchase transactions when the funds used to execute the transaction are transferred from virtual asset into cash asset for the property’s entire value or part thereof

The new policy states that if the buyer or seller is a corporate entity, such buyer or seller is required to provide its commercial license, statutes, register of real beneficiaries, copies of Emirates IDs or the passports of all concerned parties, or copies of Emirates IDs or the passports of all shareholders or partners. If the buyer or seller is a natural person(s), they are required to provide copies of Emirates IDs or valid passports.     

The Circular further stipulates that all licensed and registered real estate brokers and agents are required to keep relevant records and transactions for a minimum of five years. Furthermore, Suspicious Activity Reporting does not exempt real estate brokers and agents from their responsibilities in terms of submitting the following reports to the FIU via the goAML system: Suspicious Transaction Report (STR), Funds Freeze Report (FFR), Partial Name Match Report (PNMR), High-Risk Country Report (HRC), and High-Risk Country Transaction Report (HRCA), in addition to the Suspicious Activity Report (SAR).