The UAE’s dynamic real estate sector continues to attract investors from across the globe. However, due to its high transaction volumes and potential for anonymity through complex ownership structures, the sector is considered vulnerable to money laundering and terrorist financing (ML/TF).
To mitigate these risks, the UAE Ministry of Economy has issued clear AML/CFT obligations for real estate brokers, agents, and developers, including mandatory reporting requirements such as the Real Estate Activity Report (REAR) via the goAML platform.
Why Real Estate Is a High-Risk Sector
Real estate offers money launderers the ability to:
- Integrate illicit funds into legitimate assets
- Obscure beneficial ownership through layered structures
- Exploit high-value transactions with limited due diligence
These vulnerabilities are recognized in the UAE National Risk Assessment, which categorizes real estate as a sector of elevated ML/TF risk—especially when transactions involve cash, third parties, or virtual assets.
Who Is Subject to AML/CFT Obligations?
According to Cabinet Decision No. 10 of 2019, AML requirements apply to all real estate professionals involved in property transactions on behalf of clients, including:
- Licensed real estate brokers and agents
- Property developers facilitating buy/sell transactions
These entities are classified as Designated Non-Financial Businesses and Professions (DNFBPs) and must:
- Register with the goAML system
- Implement AML/CFT internal controls
- Monitor and report suspicious transactions and activities
- Submit Real Estate Activity Reports (REARs) when applicable
What Is the Real Estate Activity Report (REAR)?
The REAR is a mandatory report submitted via the UAE FIU’s goAML platform when specific risk scenarios arise in property transactions. As per Circular No. 5/2022, filing a REAR is required in the following cases:
1. Cash Transactions ≥ AED 55,000
If any single or multiple physical cash payments equal or exceed AED 55,000—whether partial or full—toward the value of a freehold property, the broker or developer must submit a REAR.
2. Virtual Asset Payments
A REAR is required when any portion of a freehold property is purchased using virtual assets (e.g., cryptocurrency).
3. Funds Originating from Virtual Assets
If funds used in the property transaction were previously converted from virtual assets into fiat currency, a REAR must still be submitted—even if the final payment is in cash or bank transfer.
Customer Screening: A Critical Step in Real Estate AML Compliance
Before engaging in any property transaction, real estate brokers, agents, and developers are required to screen all parties involved—buyers, sellers, and any intermediaries—against sanctions lists, watchlists, and Politically Exposed Persons (PEPs) databases. This process ensures that the business is not facilitating a transaction linked to:
- Sanctioned individuals or entities
- Persons involved in terrorism or financial crime
- High-risk individuals requiring Enhanced Due Diligence (EDD)
Customer Screening Must Include:
- Verification of full legal names and nationalities
- Matching against UN, OFAC, EU, and local UAE watchlists
- PEP status checks and relation to high-risk jurisdictions
- Screening of legal entities for beneficial ownership transparency
Customer screening is particularly important when the transaction involves:
- Cash payments
- Virtual assets or high-risk financial flows
- Offshore companies or foreign nationals with opaque profiles
Failure to conduct proper screening could result in unintentional violations of AML laws, missed red flags, or even facilitation of illicit finance.
Required Information for REAR Submission
To comply, real estate firms must obtain and maintain:
- Emirates ID or passport of all natural persons
- Trade license, Articles of Association, and UBO register (for legal entities)
- Purchase & Sale Agreement, invoices, and receipts
- Identification of Ultimate Beneficial Owners (UBOs)
- Copies of documents for all partners, shareholders, and authorized signatories
All documents and REAR-related records must be retained for a minimum of 5 years.
Key AML Compliance Actions for Real Estate Firms
- Conduct Risk-Based Customer Due Diligence (CDD)
- Identify and verify the customer and UBOs
- Assess the source of funds
- Apply Enhanced Due Diligence (EDD) for high-risk profiles (e.g., PEPs, foreign entities)
- Submit a REAR When Required
- REAR filing is transaction-triggered, not suspicion-based
- REAR submission is separate from Suspicious Transaction Reports (STRs) or Suspicious Activity Reports (SARs), which may still be required depending on circumstances
- Train Staff to Identify Red Flags
Common red flags in real estate include:
- Reluctance to provide identity or ownership details
- Use of complex corporate structures or third parties
- Transactions inconsistent with known client profile
- High-value transactions conducted in cash or through virtual assets
REAR Does Not Replace Other AML Reports
Real estate professionals must understand that filing a REAR does not exempt them from submitting other types of reports when appropriate, such as:
- Suspicious Transaction Reports (STR)
- Suspicious Activity Reports (SAR)
- Funds Freeze Reports (FFR)
- Partial Name Match Reports (PNMR)
- High-Risk Country Reports (HRC/HRCA)
Each type of report serves a distinct purpose in supporting the UAE’s national AML framework.
With the implementation of REAR reporting and enhanced AML obligations, the UAE real estate sector now plays a direct role in the country’s fight against financial crime. Real estate firms must move beyond routine checks and adopt a risk-based, compliance-driven approach—ensuring full alignment with regulatory expectations.
Proper understanding and timely submission of REARs not only safeguard your business from penalties but also support the broader goal of maintaining transparency and integrity in the UAE property market.
