When is enhanced due diligence required in a UAE real estate transaction?
Enhanced due diligence (EDD) is required whenever a real estate transaction presents a higher risk of money laundering or terrorist financing. Typical triggers include a politically exposed person (PEP), a buyer or beneficial owner connected to a high-risk jurisdiction, complex or opaque ownership structures, unusually large cash elements, and transactions that lack an obvious economic rationale.
When EDD applies, the broker must take additional measures such as obtaining senior management approval to proceed, establishing and corroborating the source of funds and source of wealth, gathering more detailed information on the purpose of the transaction, and applying intensified ongoing monitoring. The extent of these measures should be proportionate to the specific risk identified and clearly documented so the firm can demonstrate its reasoning to the supervisor.
Legal Reference (UAE):
· Federal Decree-Law No. 10 of 2025, Article 19(1)(a) and (b) - require a risk-based approach and CDD calibrated to the assessed level of risk.
· Cabinet Resolution No. 134 of 2025 (Executive Regulations) - sets out the cases requiring enhanced due diligence and the measures involved.
For more details, consult the Executive Regulations or seek guidance from your AML compliance officer.