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Ministerial decision to combat money laundering in real estate

3 Aug 2021

H E Dr Khalfan bin Said al Shu’aili, Minister of Housing and Urban Planning, has issued a Ministerial Decision on regulations controlling real estate mediation offices and companies, and real estate developers with regard to money laundering and terrorism financing.

The decision is based on the Law Regulating Mediation Business in the field of Real Estate, the Law on Combating Money Laundering and Terrorism Financing, and Escrow Account System for Real Estate Development Projects.

According to a statement issued by the Ministry of Housing and Urban Planning on Tuesday, the regulation – that includes 33 articles – comes in line with the global trends of combating this phenomenon, and to limit suspicious operations in buying and selling of real estate properties.

The latest decision comes to ensure that offices and firms involved in real estate mediation, as well as real estate developers take necessary actions to ‘identify the risks of money laundering and terrorism financing in their businesses’.

The regulation calls for high efficiency standards while appointing employees in the real estate sector, beside providing them with ongoing training on all aspects and requirements of combating money laundering and terrorism financing. It also looks to familiarise them with modern developments and technologies which come handy in detecting suspicious transactions and activities related to such crimes and help in implementing an effective system to check and verify the extent of compliance with policies, procedures, systems and internal control processes.

The regulation confirmed the need for documentation of risk assessment processes and the study of money laundering and terrorism financing risks by licensed real estate mediators, agents, offices and firms as well as real estate developers. 

‘This shall include risks related to the development of new products and techniques. That study and its relevant information shall be kept in written form, making sure it is updated periodically and provided to the competent authorities upon request,’ said the statement. 

‘Besides, due diligence measures shall be developed and applied in high risks cases, while mitigating measures may be developed and applied in low risks cases, provided that there is no suspicion of money laundering or terrorism financing operations, and ensure that transactions whose value is equal to or exceeding the limit set by the ministry reported to the National Centre for Financial Information.’

As clearly stipulated in the regulation, any group involved in the real estate sector including the developers must enforce international resolutions to combat money laundering and the terrorism financing.

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