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0 CommentsOn August 8, the UAE introduced new reporting requirements for real estate transactions involving digital assets. The new rules require all real estate agents, brokers, and law firms to report all property transactions with crypto assets.
According to the UAE government, the new rules are aimed at clamping down on money laundering and terrorist financing.
As Dubai and Abu Dhabi are lately attracting packs of crypto exchanges and businesses, a number of major real estate developers have announced they accept crypto. For instance, luxury property developers DAMAC and Binghatti started accepting payments in Bitcoin and Ethereum this year.
Furthermore, the UAE officials want to ensure that the region’s anti-money laundering and anti-terrorism financing (AML/CFT) standards are equipped to cover digital assets.
As a result, the Ministry of Economy and Ministry of Justice, in partnership with the UAE Financial Intelligence Unit (FIU), have introduced these new reporting requirements. Also, the government consulted with the Executive Office for Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT).
According to the new rules, real estate agents, brokers, and law firms are required to report all transactions involving crypto to the FIU. As the UAE government said, this includes all transactions where payment is made, either in part or full, in cash equal to or above AED 55,000 (roughly $15,000), in cryptocurrencies or funds derived from a virtual asset.
As the government did not mention a threshold for reporting virtual asset payments for real estate, all crypto transactions, no matter how small, will have to be reported.
Also, all real estate agents, brokers, and law firms have to report the ID and other relevant documents of the parties involved in the transaction. The reporting requirements apply to both individual and corporate entities buying or selling properties in the region, the UAE government said.
Abdullah Sultan Bin Awwad Al Nuaimi, UAE Minister of Justice, stated that the new rules will enable UAE to take quick action to protect the region from “known and emerging risks.”
“These new measures will improve the quality of financial intelligence available to the FIU and will be used to trace the suspicious movement of funds or investments as part of our fight against money laundering and terrorism financing,” said the head of UAE FIU Ali Faisal Ba’Alawi.
The UAE government said it has arranged three workshops to ensure that all real estate agents and brokers are prepared for the reporting requirements.
Also, the Minister of Economy Abdulla bin Touq Al Marri said that the new reporting requirements will leave little to no room for manipulation or illegal practices that could affect the economy and investments in the real estate sector.
Global anti-money laundering standard-setter the Financial Action Task Force (FATF) is attempting to clamp down on using crypto to launder the proceeds of crime or fund terrorism, including via the “travel rule,” a controversial way of identifying and tracking payers.
Christopher Flinos, the CEO of Hayvn, said opening up the UAE real estate to cryptocurrency payments could be the biggest change to the sector since the Palm Jumeirah was announced. In his words, the benefits of crypto payments, including no cheques, no loans, no fees, no taxes, and lower costs, make better houses more affordable for customers.
