How does trade-based money laundering affect UAE businesses?
Trade-based money laundering uses trade transactions to disguise the movement of illicit value. Common techniques include over-invoicing and under-invoicing, multiple invoicing for the same goods, and misdescribing the type or quantity of goods so that money can be moved across borders under the cover of legitimate trade. The UAE’s position as a major trading hub makes this a live risk, and the 2024 National Risk Assessment flagged it as an area needing closer attention.
Businesses involved in trade finance, cross-border commerce or high-value goods should treat trade-based money laundering as a specific risk within their assessment. Practical controls include scrutinising pricing against market norms, checking that documentation matches the underlying transaction, and monitoring for unusual routing of goods or payments.
Legal Reference (UAE):
· UAE National Risk Assessment 2024 (NAMLCFTC): identifies trade-based money laundering as a risk exploited through the UAE’s trade economy.
· Cabinet Resolution No. 134 of 2025 (Executive Regulations), Article 5(1)(a): transaction risk must be considered in the firm’s risk assessment.
For more details, consult the full text of the National Risk Assessment or seek guidance from your AML compliance officer.