January 18, 2023
New Rules Issued for Real Estate Brokers in UAE
The UAE has strengthened regulations governing real estate investments and requested that real estate brokers, attorneys, and property agents disclose cash transactions totaling Dh55,000 to the UAE’s Financial Intelligence Unit. The new specifications guarantee the creation of regulatory frameworks, leaving little to no possibility for fraud or criminal activity.
New reporting requirements for specific real estate transactions carried out in the UAE have been published by the Ministries of Economy (MoE), Justice (MoJ), and Financial Intelligence Unit (FIU) of the UAE.
The UAE is one of the first nations to create a method for real estate transactions incorporating virtual assets, claims the state news agency WAM.
As a result of the new rules, all real estate brokers, attorneys, and agents will be required to submit reports to the FIU for any purchase or sale of freehold real estate properties in the United Arab Emirates that includes any of the following three methods of payment, whether for all or part of the property’s value:
- Single or multiple cash payment(s) equal to or above Dhs55,000
- Payments that include the use of a virtual asset
- Payments where the fund(s) used in the transaction were derived from a virtual asset
Rules are applicable to both people and business entities
Real estate agents, brokers, and law offices must acquire and record the identity documents of the parties to the applicable transaction and any other pertinent transaction-related documents as part of the reporting mechanism. The statement claims that private persons and business entities would be subject to the new regulations.
The MoE, MoJ, FIU, and other relevant UAE agencies, notably the Executive Office for Anti-Money Laundering (AML) and Countering the Financing of Terrorism, held several meetings and discussions before making the decision.
The UAE is one of the first nations to put such a system in place for real estate deals involving virtual assets, serving as the most recent illustration of the country’s long-lasting and constantly-evolving strategy in the worldwide struggle against money laundering and terrorism funding.
Constructing a regulatory structure
The real estate industry is one of the most important areas for investment and a fundamental pillar of the nation’s economic development, according to Abdulla bin Touq Al Marri, minister of economy. He explained that as a result, the UAE is eager to create policies and guidelines that support ethical financial practices in the industry and are consistent with the highest international standards.
According to Al Marri, “the new standards safeguard the growth of their regulatory frameworks, leaving little to no space for manipulation or unlawful acts that might adversely affect the work environment, the economy, and investment within these sectors.”
Efforts to combat money laundering
The introduction of reporting requirements for specific real estate transactions, according to Abdullah Sultan bin Awwad Al Nuaimi, Minister of Justice, is another illustration of how the UAE is coordinating within the government and with the private sector to strengthen the legal framework for fighting money laundering and countering the financing of terrorism.
“The UAE is able to take prompt action to safeguard the economy from known and developing threats by working closely together to establish a clear regulatory framework and effective reporting systems,” he added.
As part of our effort to combat money laundering and the financing of terrorism, these new measures, according to Ali Faisal Ba’Alawi, director of the UAE FIU, will enhance the quality of financial intelligence that the FIU has access to. They will also be used to track the suspicious movement of funds or investments.
The measures, he added, “importantly reinforce the stability and integrity of the UAE’s real estate market and give all stakeholders with more transparency in a sector that is a vital contributor to the UAE’s economy.”
Taking the appropriate course of action
Real estate is one of the main drivers of economic development, and the current move may result in a little slowdown, which is required to manage inflation; the new regulation will also assist prevent fraud and guarantee long-term sustainable growth. The UAE is raising the threshold of regulatory compliance, and it is a step in the correct way to enhance the stability of the financial sector.”