The UAE’s real estate sector is under increasing scrutiny from AML regulators, and rightly so—property transactions remain a common route for money laundering. As a real estate professional, you’re not just expected to register on goAML and maintain an AML policy. You must also apply Enhanced Due Diligence (EDD) when red flags arise.
This blog will help you understand when and how to apply EDD to protect your firm and meet your legal obligations.
1. What Is Enhanced Due Diligence (EDD)?
EDD refers to a deeper level of investigation into a client or transaction beyond standard checks. It's triggered when the risk of money laundering is elevated—whether because of the client's profile, transaction value, or suspicious behavior.
EDD may involve:
- Collecting additional identification documents
- Verifying source of funds in greater detail
- Monitoring the transaction more closely
- Getting senior management approval before proceeding
How EDD Differs from KYC and CDD:
- KYC (Know Your Customer): The basic process of identifying and verifying the identity of a client.
- CDD (Customer Due Diligence): A more structured version of KYC that includes understanding the nature of the business relationship and assessing the risk.
- EDD (Enhanced Due Diligence): Triggered by higher-risk situations, requiring additional scrutiny beyond what’s required in KYC or CDD.
In short:
- KYC = Who is the client?
- CDD = What’s the client doing?
- EDD = Is anything suspicious or risky? Let’s dig deeper.
Real Estate Examples:
- KYC Example: A first-time buyer walks into a real estate office. The agent collects a valid Emirates ID and verifies the client’s identity.
- CDD Example: A foreign investor is purchasing an off-plan property. The agency gathers additional information about the investor's business and payment structure.
- EDD Example: A client is purchasing three properties in cash using an offshore entity. The agency requests proof of source of funds, runs enhanced background checks, and flags the transaction for internal review.
2. When to Apply EDD in Real Estate Deals?
Some common red flag scenarios requiring EDD:
- The buyer is from a high-risk jurisdiction
- The transaction involves unusually complex ownership structures
- The source of funds is unclear or unverifiable
- The client is politically exposed (PEP)
When in doubt, escalate and apply EDD measures.
3. How InfoAML Makes EDD Easier
InfoAML’s built-in risk scoring and alert system allows you to:
- Auto-detect when EDD is required based on transaction details
- Prompt for additional documentation from clients
- Maintain a full audit trail of EDD steps
- Generate internal pre-STR reports if the risk persists
Learn more here: 🔗 InfoAML Features Page
Conclusion: Enhanced Due Diligence is not just a formality—it’s your front line defense against regulatory penalties, reputational damage, and enabling financial crime. By knowing when to apply EDD and how to manage it effectively, you show that your firm takes AML obligations seriously.
→ Want to see how EDD works inside InfoAML? [Schedule a free demo] and discover how our platform can support you.