In the UAE, Cabinet Resolution No. (71) of 2024 outlines 41 specific violations that can lead to hefty fines for Designated Non-Financial Businesses and Professions (DNFBPs), including real estate companies.
At InfoAML, we believe that clarity is compliance. In this four-part series, we interpret each violation in plain language, link it to real estate scenarios, and help you avoid unnecessary penalties.
This first part covers Violations 1–10, focusing on governance, internal controls, and early-stage risk failures.
📌 Legal Notice:
This content is for general informational purposes only. While InfoAML strives to ensure accuracy, this blog does not constitute legal advice or replace formal consultation with a licensed compliance expert or lawyer in the UAE.
Violations 1–10 Explained
- Violation 1
"Failure to set policies, measures and internal controls approved by
the top management with the aim to combat committing crimes."
Fine: AED 100,000 – 200,000
Tags: governance, internal-controls
📌 If your company doesn’t have formal AML policies, or they weren’t approved and signed off by leadership, this is a violation.
Real estate example: A brokerage operates without a documented AML policy, relying on verbal guidance and outdated practices.
- Violation 2
"Internal policies and procedures are not consistent with the crime
risks and the nature and size of the facility, or failure to update
them continuously."
Fine: AED 50,000 – 100,000
Tags: governance, policy-review, risk-assessment
📌 Using a generic template not tailored to your business, or failing to update your policy with regulatory changes, violates this clause.
Tip: Update your policy at least once every 12 months.
- Violation 3
"Failure to apply internal policies, procedures, and controls to a
branch of the facility or a subsidiary company in which facility
holds a majority stake."
Fine: AED 50,000 – 100,000
Tags: group-compliance, subsidiary-governance
📌 If your company owns a second real estate branch or a sister company and doesn't apply the same AML policy there, you're in breach.
- Violation 4
"Failure to include any of the provisions listed in Article (20) of the Executive Regulation in the internal policies, procedures, and controls."
Fine: AED 50,000 – 200,000
Tags: internal-controls, policy-completeness
📌 Article 20 requires your AML policy to include things like customer due diligence, reporting procedures, compliance roles, internal audits, and training. Missing any of these? You're at risk.
- Violation 5
"Failure of the facility to take necessary measures and procedures to identify, assess, understand, document, and continuously update crime risks in its field, as well as to provide such information upon request."
Fine: AED 50,000 – 500,000
Tags: risk-assessment, documentation, audit-readiness
📌 You must identify risks tied to your business activities (e.g., property type, client base, countries of origin) and document them. Authorities can request this at any time.
- Violation 6
"Failure of the facility to consider all relevant risk factors, such as risks of customer. States, geographical regions, products and services, operations, and delivery channels of services and products before determining the overall risk level and the appropriate level of risk mitigation measures that will be applied."
Fine: AED 50,000 – 500,000
Tags: risk-factors, risk-based-approach
📌 This violation penalizes businesses that apply a one-size-fits-all approach to risk without looking at who the customer is or where the money is coming from.
Tip: Use a risk scoring matrix to meet this obligation.
- Violation 7
"Failure of the facility to undertake the actions and procedures necessary to mitigate the risks identified based on the results of the National Risk Assessment or the self-assessment process given the nature and scale of the violator’s business."
Fine: AED 50,000 – 1,000,000
Tags: risk-mitigation, national-risk-assessment
📌 If the UAE’s National Risk Assessment identifies real estate as high-risk and your firm ignores it, that’s noncompliance.
- Violation 8
"Failure of the facility to identify and assess the risks that may arise in the violator’s field of work when developing the services that the violator offers or when conducting new professional practices through its facility."
Fine: AED 50,000 – 500,000
Tags: new-products, service-expansion, risk-evaluation
📌 Launching a new service (e.g., fractional ownership) without evaluating its AML risks violates this rule.
Tip: Every new activity must trigger a documented risk check.
- Violation 9
"Failure to undertake the necessary customer due diligence measures before establishing the business relationship or performing a casual transaction in favour of the customer that is equal to or more than (AED 55,000), whether it is a sole or multiple transactions that seem connected, or upon making casual transactions in the form of telegraph transfers equal to or more than (AED 3,500) or when suspicion exists about the crime, data validity or sufficiency to identify the identity of the customer that was previously obtained."
Fine: AED 50,000 – 200,000
Tags: CDD, threshold-checks, client-verification
📌 You must verify the client’s identity before starting a relationship or handling large transactions (AED 55,000+ or AED 3,500+ telegraphic transfer).
Mistake to avoid: Letting a client pay a deposit before verifying ID.
Violation 10
"Failure of the facility to conduct risk management procedures with respect to circumstances where a customer would benefit from the business relationship before the verification process."
Fine: AED 100,000 – 500,000
Tags: risk-control, CDD-lapse, early-engagement-risk
📌 If a buyer receives benefits (e.g., offer letters or booking confirmations) before KYC is completed, you must apply strict temporary controls or halt the process.
Final Thoughts – Part 1
These first 10 violations reflect foundational weaknesses, poor policies, insufficient risk evaluation, and early-stage failures in customer due diligence.
Many real estate companies unknowingly fall into these traps. But the penalties are real, and increasingly enforced.
👉 Continue to Part 2 – Violations 11–20
Learn how missing CDD/EDD steps or failing to verify client identity can lead to hefty penalties.
Resources
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