According to new rules in the United Arab Emirates, all real estate brokers, agents, and law firms will have to report transactions that involve the use of virtual currencies as payment.
The Financial Intelligence Unit (FIU) will be the authority to whom they will report these transactions, including real estate sales or purchases that involve funds derived via virtual assets.
New reporting requirements
The government of the United Arab Emirates (UAE) said that real estate transactions would now have to face new reporting requirements if virtual currencies are used for payment purposes.
The UAE has chosen to introduce these new reporting requirements because it wants to highlight its evolving and sustainable approach in the global battle against terrorist financing and money laundering.
WAM published a report, which disclosed that there had been several discussions and meetings held by the Financial Intelligence Unit (FIU) and the UAE’s Ministry of Justice and Economy.
These discussions had been about how reports have to be filed by real estate brokers, agents, and law firms for property sales and purchases to the FIU.
Eventually, they decided to alter the reporting requirements.
In accordance with the new rules, all cash transactions have to be reported by real estate agents to the FIU, where multiple or single payments are around AED 55,000.
In the case of digital currencies, brokers and agents have to report payments to the FIU when virtual assets are used for payment purposes.
The same rules have to be followed when the funds used in the transaction are obtained via the use of a virtual asset.
The WAM report disclosed that under the new mechanism for reporting, the real estate brokers, agents, and law companies would have to get the identification documents of those involved in the transaction.
They would also be required to obtain other relevant documents associated with the transaction. According to the report, the rules would be applicable to corporate entities as well as individuals that are involved in the said real estate transactions.
Economic and financial stability
Abdulla bin Touq Al Marri, the economy minister of the UAE, commended the introduction of these new reporting requirements.
He said that they would help in ensuring financial and economic stability and also minimize the risk of businesses engaging in malpractice.
Abdullah Sultan Bin Awwad Al Nuaimi, the Justice Minister, stated that the introduction of the new reporting requirements showed that the private sector and the government were collaborating.
He stated that these new reporting rules for the real estate sector were an indication that the private sector and the government were working together to counter terrorism financing and minimize money laundering.
Ali Faisal Ba’Alawi, the FIU’s head, stated that the FIU would be able to access a better quality of financial intelligence with the help of these new requirements.
Ba’Alawi stated that the FIU would also be able to take advantage of the new requirements for tracing any suspicious investments, or transfers of funds.