AML enforcement in the UAE has entered a more assertive phase. In 2025, regulators are no longer focusing solely on technical gaps or missing documents—they are penalizing governance failures. Recent enforcement actions show a consistent pattern: when AML controls fail, the root cause is often weak oversight, unclear accountability, and poor decision-making at senior levels.

For UAE businesses—especially DNFBPs and high-risk sectors like real estate—these cases offer valuable lessons. Understanding why regulators imposed penalties is far more important than knowing what rule was breached.

This article examines common AML governance failures seen in recent UAE enforcement, explains why real estate continues to be targeted, shows how the risk-based approach (RBA) is expected to operate in practice, and outlines how companies can strengthen governance to avoid similar outcomes.

Why Governance Has Become the Center of AML Enforcement

Across recent regulatory actions, UAE authorities have emphasized one message:
AML is a governance responsibility, not a compliance checklist.

Enforcement findings increasingly point to:

• Senior management disengagement from AML risk

• AML officers lacking authority or independence

• Escalations ignored or delayed due to commercial pressure

• Risk assessments that exist on paper but not in practice

Even where policies and KYC files existed, regulators imposed penalties because governance structures failed to prevent predictable risks.

Why Real Estate Features Prominently in Enforcement Cases

Real estate continues to be one of the most scrutinized sectors under the UAE AML framework.

Criminals prefer real estate because:

• High-value transactions allow movement of large sums in a single deal

• Complex ownership structures can obscure beneficial ownership

• Historically lighter regulation than banking created structural gaps

• Asset conversion makes illicit funds harder to trace or seize

In multiple jurisdictions worldwide, illicit money flowing into real estate has inflated property prices, reduced affordability, and damaged communities. These broader harms explain why UAE regulators now apply stricter governance expectations to real estate companies and professionals.

Common AML Governance Failures Seen in Recent Enforcement

1. AML Treated as a Compliance Function Only

One of the most frequent findings is that AML responsibility was pushed entirely onto compliance teams, with minimal senior management involvement.

Regulators now expect:

• Active oversight by directors and partners

• Regular AML reporting to leadership

• Evidence of challenge and decision-making

When leadership cannot explain AML risks, penalties often follow.

2. Weak Authority of AML Officers

In many enforcement cases, AML officers:

• Reported into sales or operations

• Had recommendations overridden

• Lacked direct access to senior management

This undermines independence. Regulators increasingly treat such structures as governance failures, not staffing issues.

3. Failure to Apply the Risk-Based Approach

Businesses often claimed to follow a risk-based approach—but enforcement reviews showed:

• Uniform controls applied regardless of risk

• High-risk clients treated as low risk

• No enhanced scrutiny for complex transactions

Under guidance from the Financial Action Task Force (FATF), this is considered ineffective AML implementation.

4. Ignored or Poorly Documented Escalations

Recent cases show repeated instances where:

• Red flags were identified but not escalated

• Decisions were made without justification

• Files lacked documentation explaining approvals

Regulators view undocumented decisions as absence of accountability.

5. Legacy Clients Left Unreviewed

Several enforcement actions involved long-standing clients who:

• Were onboarded under outdated KYC standards

• Had never been risk-reassessed

• Continued transacting without scrutiny

“Legacy client” status is no longer accepted as a risk mitigation factor.

Governance and the Risk-Based Approach

The risk-based approach (RBA) is central to modern AML governance.

According to FATF principles, businesses must:

• Identify money laundering and terrorist financing risks

• Assess likelihood and impact

• Apply proportionate controls

Governance failures occur when:

• Risk assessments do not influence decisions

• High-risk activity is treated as routine

• Management does not challenge risk classifications

In recent enforcement actions, regulators explicitly linked penalties to failure of governance to operationalize RBA.

How Supervisors Are Driving Governance Accountability

AML/CFT supervision in the UAE is led by the Anti-Money Laundering and Combating the Financing of Terrorism Supervision Department (AMLD) under the Central Bank of the UAE (CBUAE).

Since 2020, supervisory actions have increasingly:

• Focused on governance effectiveness

• Involved direct interviews with senior management

• Required remediation plans addressing oversight gaps

• Linked penalties to leadership failures

In 2025, inspectors frequently ask not “Do you have controls?” but “Who owns them—and how are they enforced?”

Special Attention to Emerging and Weakly Regulated Markets

Governance failures are magnified in:

• Newly licensed real estate businesses

• Rapidly growing markets

• Family-owned or relationship-driven firms

• Regions with weaker historical enforcement

Without strong governance, these environments can quickly become safe zones for illicit activity—a key concern for regulators.

Practical Governance Lessons for UAE Companies

Based on recent enforcement trends, businesses should:

• Clearly define AML ownership at board and management levels

• Strengthen AML officer independence and authority

• Ensure risk assessments drive real decisions

• Document escalation, challenge, and approvals

• Review and refresh legacy client files

• Conduct periodic AML governance reviews

Many organizations engage experienced AML advisors to benchmark governance frameworks against current enforcement expectations.

Why Strong Governance Reduces AML Penalty Risk

Effective AML governance:

• Prevents control failures before they escalate

• Improves inspection outcomes

• Builds confidence with banks and counterparties

• Protects reputation and long-term sustainability

In 2025, regulators increasingly see weak governance—not technical errors—as the primary cause of AML breaches.

Recent AML enforcement in the UAE sends a clear signal: governance matters more than ever. Policies, KYC files, and systems are essential—but without accountability, oversight, and informed decision-making, they offer little protection.

For real estate and other high-risk sectors, the lessons are clear. Businesses that strengthen AML governance, embed a true risk-based approach, and hold leadership accountable will be far better positioned to avoid enforcement action and operate confidently in the UAE’s evolving regulatory environment.