Introduction
Power of Attorney arrangements are common in UAE real estate transactions.
A buyer may be outside the UAE.
A seller may be unavailable.
A family member may sign on behalf of another person.
A company representative may handle the transaction documents.
Commercially, this can make the transaction easier. But from an AML perspective, it creates an important question:
If someone signs through a Power of Attorney, who should the real estate firm screen?
The answer is simple in principle: the firm should not look only at the person holding the Power of Attorney. It should also understand and assess the actual buyer or seller behind the transaction.
A Power of Attorney gives authority to act. It does not replace AML checks on the real party to the transaction.
Why POA Transactions Need AML Attention
A Power of Attorney is not suspicious by itself. Many POA arrangements are legitimate and practical.
However, POA transactions deserve attention because they separate two important roles:
- the person who is actually buying or selling the property; and
- the person appearing, signing, or giving instructions on their behalf.
This separation can create risk if the firm does not clearly understand:
- who the real buyer or seller is,
- who is acting on their behalf,
- whether the representative is properly authorized,
- whose funds are being used,
- where sale proceeds will go,
- and whether the arrangement makes commercial sense.
The AML issue is not the existence of the POA. The issue is whether the POA is being used transparently and whether the firm can evidence its review.
The Main AML Rule: Check the Principal and the Representative
In most POA situations, there are two key parties:
The Principal
The principal is the actual buyer, seller, property owner, or customer. This is the person or entity behind the transaction.
The firm should identify and assess the principal because they are the real party buying or selling the property.
Depending on the case, this may include:
- identity verification,
- sanctions screening,
- PEP screening where applicable,
- customer risk assessment,
- source of funds or source of wealth review where required,
- beneficial ownership checks if the principal is a company.
The Attorney or Representative
The attorney or representative is the person authorized to act on behalf of the principal.
This person should also be identified and screened because they are directly involved in the transaction. They may be signing documents, giving instructions, receiving information, or coordinating with the brokerage.
The firm should check:
- who the representative is,
- whether they are properly authorized,
- whether the POA covers the specific transaction,
- whether the representative is acting within the authority granted,
- whether any sanctions, PEP, or other risk indicators appear.
The practical rule is:
Screening only the attorney is not enough. Ignoring the attorney is also not enough.
The firm should understand both sides of the arrangement.
What the POA Document Should Confirm
The Power of Attorney document should not be treated as a formality.
Before relying on it, the firm should review whether the document clearly confirms:
- who granted the authority,
- who received the authority,
- what powers were granted,
- whether the authority covers buying, selling, signing, receiving funds, or making payments,
- whether the POA is still valid,
- whether the document relates to the relevant property or transaction,
- whether the names and details match the transaction file.
If the POA is unclear, expired, inconsistent, too broad, or unrelated to the transaction, the file should be escalated before proceeding.
The firm does not need to turn every POA review into a legal investigation, but it should be able to show that the authority was checked and accepted on a reasonable basis.
Common POA Scenarios in Real Estate
Different POA situations create different AML questions.
| Scenario | What the firm should check |
|---|---|
| Buyer uses a POA | Identify and screen the buyer and representative. Confirm the representative is authorized to buy or sign. Review source of funds where required. |
| Seller uses a POA | Identify and screen the seller and representative. Confirm ownership or authority to sell. Review where sale proceeds will be paid. |
| Company uses a representative | Review the company documents, authorized signatory, UBOs where applicable, and the representative’s authority. |
| Family member acts under POA | Confirm the relationship, authority, identity, and whether the transaction and funds are consistent with the explanation. |
| Representative controls most communication | Confirm that the principal is properly identified and that the representative is not hiding the real party or purpose of the transaction. |
This table shows the main point: the POA may change who signs, but it does not remove the need to understand the real transaction parties.
When a POA Creates Higher AML Risk
A POA should receive closer review where the arrangement creates uncertainty or does not match the transaction.
Higher-risk indicators may include:
- the principal is unavailable for verification,
- the representative refuses to provide principal information,
- the principal is from a high-risk jurisdiction,
- the representative is unrelated to the principal,
- the POA was issued recently with no clear explanation,
- funds come from someone other than the buyer,
- sale proceeds are directed to someone other than the seller,
- the representative has unusually broad authority,
- the transaction value does not match the principal’s profile,
- the arrangement appears to hide the real decision-maker.
These indicators do not automatically prove suspicion. However, they should trigger enhanced review and proper documentation.
What Compliance Should Ask Before Proceeding
Before accepting a POA arrangement, compliance should be able to answer:
- Who is the actual buyer or seller?
- Who is acting on their behalf?
- Has the principal been identified and screened?
- Has the representative been identified and screened?
- Is the POA valid and relevant to the transaction?
- Does the POA allow the specific action being taken?
- Are funds coming from or going to the expected party?
- Is source of funds or source of wealth required?
- Are there any sanctions, PEP, jurisdiction, UBO, nominee, or third-party payment concerns?
- Has the decision to proceed been documented?
If these questions cannot be answered, the transaction should not move forward automatically.
The Regulatory Position
UAE AML rules require regulated businesses to identify the customer and verify identity using reliable and independent sources. They also require verification that any person acting on behalf of the customer is duly authorized and identified.
This is directly relevant to Power of Attorney transactions.
In practical terms, a real estate firm should understand both the principal behind the transaction and the representative acting under the POA. If higher risk is identified, enhanced measures may be required. If required CDD cannot be applied, the transaction should be paused and escalated rather than accepted blindly.
What Evidence Should Be Kept
For inspection readiness, the file should include:
- identity documents of the principal,
- identity documents of the attorney or representative,
- copy of the Power of Attorney,
- evidence that the POA was reviewed,
- screening results for relevant parties,
- company documents and UBO details where applicable,
- source of funds or source of wealth evidence where required,
- notes explaining why the POA arrangement was accepted,
- escalation or approval notes where risk was identified,
- payment or proceeds instructions where relevant.
The file should show that the firm understood who was really behind the transaction and who was authorized to act.
Where InfoAML Helps
InfoAML helps real estate firms keep POA cases structured and inspection-ready.
In Power of Attorney transactions, InfoAML can support the compliance process by helping teams:
- store principal and representative documents,
- record related parties in the transaction file,
- keep screening results attached to the relevant parties,
- document POA review notes,
- attach UBO information where applicable,
- record source of funds or source of wealth review,
- maintain escalation and approval history,
- preserve an audit trail for inspection.
The objective is not to complicate legitimate POA transactions.
The objective is to ensure that authority, identity, risk, and evidence are properly documented.
Conclusion
Power of Attorney arrangements are common in real estate and are often legitimate.
But they should not be treated as a shortcut around AML.
The firm should understand who the real buyer or seller is, who is acting on their behalf, whether the authority is valid, whether relevant parties have been screened, and whether the transaction risk is properly documented.
The safest position is not:
“We had a Power of Attorney.”
The safest position is:
“The principal was identified, the representative was verified, relevant parties were screened, and the POA decision was documented.”
That is how real estate firms can handle POA transactions without weakening their AML controls.
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- KYB vs KYC: What’s the Difference in UAE AML?
- The Complete AML Inspection Readiness Checklist for UAE Businesses