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Many UAE businesses built their client base years before today’s enhanced AML framework existed. These legacy clients—long-standing customers onboarded under older standards—now present one of the highest compliance risks in 2025.

Regulators no longer accept the argument that “the client has been with us for years.” Under current UAE AML rules, ongoing due diligence is mandatory, and legacy relationships must meet the same risk-based standards as new ones.

This guide explains how UAE regulators expect businesses to manage legacy clients in 2025, why real estate faces heightened scrutiny, how the risk-based approach (RBA) applies, and what practical steps companies should take to remain compliant.

What Are Legacy Clients in AML Terms?

Legacy clients are customers who were:

  • Onboarded before current AML/CFT regulations came into force

  • Approved under simplified or outdated KYC standards

  • Never fully reassessed after regulatory changes

These clients often have:

  • Incomplete KYC files

  • Outdated ownership information

  • No documented source of funds

  • Limited transaction monitoring history

In 2025, these gaps are no longer tolerated.

Why Regulators Focus on Legacy Clients in 2025

UAE regulators have observed that many AML breaches originate from old relationships, not new ones. Criminals intentionally maintain long-standing accounts or relationships because they attract less scrutiny.

Key regulatory concerns include:

  • Complacency due to familiarity

  • Lack of refreshed risk assessments

  • Inadequate monitoring of changing behavior

  • Poor documentation of historical decisions

As a result, legacy clients are now considered inherently higher risk unless proven otherwise.

Why Real Estate Legacy Clients Face Extra Scrutiny

Real estate remains a top AML risk sector globally and in the UAE.

Criminals prefer real estate because:

  • High-value transactions allow large funds to move quickly

  • Complex ownership structures can hide beneficial owners

  • Lower historic regulation than banks created legacy gaps

  • Asset conversion makes funds harder to trace or seize

Many real estate firms onboarded clients years ago without:

  • Verifying Ultimate Beneficial Owners (UBOs)

  • Checking source of wealth

  • Applying ongoing monitoring

In 2025, these legacy gaps are a primary trigger for inspections and penalties.

Managing Legacy Clients Through a Risk-Based Approach

The risk-based approach (RBA) is central to legacy client management.

According to guidance from the Financial Action Task Force (FATF), businesses must:

  • Identify ML/TF risks

  • Assess likelihood and impact

  • Apply controls proportionate to risk

For legacy clients, this means:

  • No automatic “low-risk” classification

  • Reassessment based on current activity

  • Enhanced checks where risk indicators exist

Treating all legacy clients as low risk is considered a serious compliance failure.

Key AML Expectations for Legacy Client Reviews

1. KYC Refresh and Identity Verification

Businesses must:

  • Re-verify client identity

  • Identify and confirm UBOs

  • Update corporate structure records

Missing or outdated documents must be remediated promptly.

2. Understanding the Current Relationship

Regulators expect firms to assess:

  • Whether the client’s activity has changed

  • Whether transactions align with business profile

  • Whether structures have become more complex

Long-standing relationships must still make commercial sense.

3. Source of Funds and Source of Wealth Review

Legacy clients often lack proper funding documentation.

Red flags include:

  • Sudden increase in transaction values

  • Offshore or third-party payments

  • Cash-heavy activity

These require enhanced due diligence in 2025.

4. Ongoing Monitoring of Legacy Clients

Legacy clients must be:

  • Monitored continuously

  • Reviewed periodically

  • Reclassified when risk changes

Regulators now expect dynamic risk scoring, not static profiles.

Common Legacy Client Failures Seen in Inspections

During AML inspections, regulators frequently identify:

  • No documented KYC refresh cycles

  • Assumptions based on trust or tenure

  • Incomplete beneficial ownership records

  • Weak transaction monitoring for old clients

  • No escalation despite red flags

These issues often result in formal findings and remediation orders.

Role of Supervisors in Enforcing Legacy Client Compliance

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

Since 2020, supervisors have:

  • Required reassessment of legacy clients

  • Challenged “grandfathered” relationships

  • Linked penalties to outdated client files

  • Tested real-time monitoring effectiveness

In 2025, inspectors commonly ask:
“When was this client last reviewed—and why?”

Extra Scrutiny in Emerging and Weakly Regulated Markets

Legacy client risks are amplified in:

  • Newly regulated real estate markets

  • Family-owned or relationship-driven businesses

  • Regions with limited historical enforcement

Without structured legacy reviews, these markets risk becoming safe zones for illicit funds.

Practical Steps to Manage Legacy Clients in 2025

UAE businesses should adopt a structured approach:

  • Segment legacy clients by risk

  • Perform phased KYC refresh exercises

  • Prioritize high-value and high-risk clients

  • Update policies to prohibit indefinite onboarding

  • Document decisions and remediation actions

  • Train staff to challenge long-standing relationships

Many firms also engage AML advisors to design inspection-ready legacy remediation programs.

Why Proactive Legacy Management Reduces AML Penalties

Effective legacy client management:

  • Reduces regulatory findings

  • Improves audit and inspection outcomes

  • Strengthens banking relationships

  • Demonstrates strong governance

In 2025, regulators increasingly see unreviewed legacy clients as a sign of weak AML culture.

Legacy clients are no longer “safe” clients under UAE AML rules. In fact, they often represent the highest hidden risk within an organization.

For real estate and other high-risk sectors, managing legacy clients through a risk-based, documented, and ongoing review process is now a regulatory expectation—not a best practice.

Businesses that proactively refresh KYC, reassess risk, and monitor long-standing relationships will be far better positioned to meet UAE AML expectations in 2025 and avoid enforcement action.

As 2025 approaches, several significant tax changes in the UK are set to impact both individuals and businesses. One notable adjustment is the increase in National Insurance contributions for employers, rising from 13.8% to 15% starting April 6, 2025. Additionally, the earnings threshold for these contributions will be lowered from £9,100 to £5,000. This change means that employers will incur higher costs per employee, which could influence hiring decisions and wage structures.

Another significant change involves Inheritance Tax (IHT). Starting April 6, 2025, the UK will shift from a domicile-based IHT system to a residency-based one. Under the new rules, individuals who have been UK residents for at least 10 out of the previous 20 tax years will be considered ‘long-term residents’ and subject to IHT on their worldwide assets. This change could have substantial implications for expatriates and non-domiciled individuals, potentially increasing their tax liabilities

Given these upcoming changes, it’s crucial for both individuals and businesses to review their financial and tax planning strategies to ensure compliance and optimize their tax positions.

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