Understanding Compliance

Compliance refers to the practice of adhering to laws, regulations, standards, and internal policies that govern an organization’s activities. It ensures that businesses operate within the legal framework while upholding integrity, transparency, and accountability. The importance of compliance lies in protecting institutions from regulatory penalties, reputational risks, financial losses, and operational disruptions. By embedding compliance into daily operations, organizations build trust with regulators, customers, and stakeholders, which strengthens long-term sustainability and growth.
 
AML/CFT Framework and Key Pillars

In the context of Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT), compliance plays a critical role in safeguarding the financial system from being misused by criminals and terrorists. Key pillars of AML/CFT include:

• Know Your Customer (KYC): Establishes the identity of customers and assesses their risk profile.
• Customer Due Diligence (CDD): Ensures continuous monitoring of customer transactions to detect unusual or suspicious activity.
• Enhanced Due Diligence (EDD): Applies stricter checks to high-risk clients, such as Politically Exposed Persons (PEPs) or clients from high-risk jurisdictions.
• Sanctions Compliance: Prevents institutions from dealing with prohibited individuals, entities, or countries, thereby avoiding severe legal and reputational consequences.

Strong compliance practices in AML, CFT, KYC, CDD, EDD, and sanctions build resilience, protect institutions, and uphold global security by preventing illicit activities from entering the legitimate economy.

UAE AML/CFT Legal and Regulatory Framework

The UAE has enacted a comprehensive legal framework to combat money laundering and terrorist financing, including:

• Federal Decree-Law No. 20 of 2018 – Main AML/CFT law in the UAE.
• Cabinet Decision No. 10 of 2019 – Implementing Regulation for Federal Decree-Law No. 20 of 2018.
• Cabinet Decision No. 58 of 2020 – Regulation of the Procedures of the Real Beneficiary (UBO).
• Cabinet Decision No. 74 of 2020 – Terrorism List System & Implementation of UN Security Council Resolutions, including Targeted Financial Sanctions (TFS).
• Decision No. (16) of 2021 – Unified List of Violations & Administrative Fines for AML/CFT Measures.

 
AML/CFT in the Real Estate Industry

The UAE has identified real estate as a high-risk sector vulnerable to money laundering. Accordingly, real estate agencies, brokers, developers, and other Designated Non-Financial Businesses and Professions (DNFBPs) must comply with AML/CFT regulations under the Ministry of Economy’s supervision.

Key obligations include:

• Establishing internal AML/CFT policies and controls.
• Conducting KYC and CDD on all property buyers and sellers.
• Identifying and verifying Ultimate Beneficial Owners (UBOs) of corporate purchasers (natural persons owning/controlling 25% or more).
• Screening all customers and counterparties against UN, OFAC, and UAE sanctions lists.
• Retaining transaction records for at least five years.
• Reporting suspicious activities via the goAML portal to the UAE Financial Intelligence Unit.

Failure to comply can result in legal, regulatory, financial, reputational, and operational consequences. Both institutions and individuals—including directors, employees, and compliance officers—may be held accountable.
 
Final Word

Compliance in AML and CFT is not a box-ticking exercise—it is a safeguard for institutions, industries, and the economy. For real estate agencies and DNFBPs, implementing robust compliance frameworks ensures integrity in property transactions and shields businesses from financial crime risks.

Just as eviction laws in property management are designed to prevent misuse and protect tenant rights, AML compliance is designed to prevent misuse of financial systems and protect the economy.

At fam Conveyancing, we help real estate professionals and businesses structure their compliance strategies with clarity, foresight, and accountability—avoiding costly mistakes and protecting long-term value.

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