What is trade-based money laundering and why is it a threat in the UAE?
Trade-based money laundering (TBML) is the process of disguising criminal proceeds and moving value through trade transactions, for example by over- or under-invoicing goods, misdescribing quantity or quality, or using multiple invoices for the same shipment. It exploits the complexity and volume of international trade to make illicit flows look like legitimate commerce.
The UAE ML/TF Risk Assessment 2024 identifies TBML as one of the predominant money laundering typologies, reflecting the country’s position as a major regional trade and re-export hub with large volumes of transactions and international trading partners. Regulated entities exposed to trade finance and trading customers should build TBML red flags into their monitoring, scrutinise unusual pricing, routing and documentary inconsistencies, and escalate suspicious activity.
Legal Reference (UAE):
· Federal Decree-Law No. 10 of 2025, Article 19(1)(a) — risks such as TBML must be identified, assessed and continuously updated.
· Federal Decree-Law No. 10 of 2025, Article 18 — suspicious transactions must be reported to the Unit.
For more details, consult the full text of the UAE NRA 2024 or seek guidance from your AML compliance officer.