Regulatory reviews in the UAE have become increasingly detailed, structured, and data-driven. Supervisory authorities no longer focus only on whether an organization has Anti-Money Laundering policies in place. Instead, they examine whether those policies are effectively implemented, monitored, and supported by reliable documentation.

For businesses operating in audit, accounting, tax advisory, real estate, and other designated non-financial sectors, understanding common AML findings during regulatory inspections is essential. Identifying these recurring weaknesses allows organizations to proactively strengthen their compliance frameworks and reduce exposure to penalties.

Incomplete or inconsistent customer due diligence

One of the most frequent findings during AML inspections is incomplete customer due diligence (CDD). Regulators often identify missing identification documents, outdated beneficial ownership records, or vague descriptions of business activities.

Know Your Customer (KYC) procedures must verify both the immediate client and the ultimate beneficial owner. In many cases, files contain shareholder information but lack clarity regarding the natural person controlling the entity.

Inconsistent data across systems—such as discrepancies between onboarding forms and accounting records—raises concerns about internal controls and oversight.

Weak application of the risk-based approach

The risk-based approach (RBA) is central to AML compliance in the UAE. Instead of applying uniform controls to all clients, organizations must assess money laundering and terrorist financing risks and allocate enhanced scrutiny to higher-risk relationships.

Guidance from the Financial Action Task Force emphasizes proportionate risk management.

During inspections, regulators frequently identify situations where:

– All clients are categorized as low or medium risk
– Risk assessments lack documented methodology
– High-risk clients do not receive enhanced due diligence
– Risk ratings are not updated after changes in transaction behavior

If an organization cannot demonstrate how risk levels were determined, supervisors may view the entire framework as ineffective.

Real estate-related transaction vulnerabilities

Real estate continues to be a focus area in regulatory reviews.

Criminals are drawn to property transactions because they involve high-value assets, enabling large sums of money to move in a single deal. Compared to banks, real estate has historically faced lighter regulatory oversight in certain markets, creating opportunities to conceal the origin of funds or obscure beneficial ownership through shell companies or third-party buyers. Once funds are invested in property, tracing or recovering them becomes more difficult. In some countries, this activity has driven property prices beyond the reach of average citizens and disrupted communities.

Regulatory findings in real estate-related businesses often include insufficient source of funds verification, failure to question unusual pricing, and lack of monitoring for complex ownership structures.

Disconnected accounting and compliance systems

Another common finding involves fragmented systems. When accounting platforms operate separately from compliance monitoring tools, transaction data may not align with risk classifications.

Inspectors may detect:

– High-value transactions not reflected in risk reassessments
– Cash payments without documented scrutiny
– Offshore transfers lacking enhanced review
– Inconsistent client data between finance and compliance departments

Such discrepancies suggest weak internal coordination and inadequate monitoring mechanisms.

Insufficient ongoing monitoring

AML compliance is not limited to onboarding. Ongoing monitoring of client relationships is equally important.

Regulators frequently identify:

– Lack of periodic customer reviews
– Failure to update beneficial ownership after structural changes
– No evidence of transaction pattern analysis
– Delayed or absent suspicious activity reporting

Static client files indicate that organizations are not adapting to evolving risk exposure.

Governance and senior management oversight gaps

Supervisors in the UAE increasingly evaluate governance structures. AML responsibility does not rest solely with the compliance officer. Senior management and boards must demonstrate active involvement.

AML/CFT supervision in the UAE is overseen by the Anti-Money Laundering and Combating the Financing of Terrorism Supervision Department under the authority of the Central Bank of the UAE.

Common governance-related findings include:

– Lack of documented board-level AML discussions
– Insufficient allocation of compliance resources
– No evidence of review of MLRO reports
– Absence of independent AML audits

Regulators assess whether leadership supports a culture of compliance or treats AML as a procedural obligation.

Weak documentation and audit trails

Even when controls exist, poor documentation can lead to adverse findings. Regulators expect organizations to maintain clear audit trails for risk assessments, enhanced due diligence decisions, and suspicious activity evaluations.

Missing documentation can create the impression that controls were never implemented.

Challenges in emerging or underdeveloped markets

In developing real estate markets or rapidly expanding sectors, supervisory bodies often observe limited AML maturity. New market entrants may lack structured compliance systems. Limited awareness can result in superficial documentation practices.

Supervisors may apply stricter monitoring in these environments, particularly where historical enforcement has been weak.

Practical steps to reduce adverse findings

Conduct internal AML gap assessments
Regularly review client files and risk assessments for completeness and consistency.

Strengthen documentation controls
Maintain structured records for risk classification decisions and monitoring activities.

Integrate financial and compliance systems
Ensure that transaction data feeds directly into risk monitoring frameworks.

Enhance staff training
Employees must understand regulatory expectations and sector-specific risks.

Engage AML advisors in the UAE
Independent reviews can identify weaknesses before regulatory inspections occur.

Common AML findings during UAE regulatory reviews often stem from documentation gaps, weak risk-based implementation, fragmented systems, and limited governance oversight. In high-risk sectors such as real estate, scrutiny is even greater due to the potential for large-value transactions and complex ownership structures. Organizations that proactively address these recurring issues strengthen their compliance posture, reduce regulatory exposure, and demonstrate a commitment to effective AML controls within the UAE’s evolving regulatory framework.