Trade-Based Money Laundering (TBML) has become one of the fastest-growing financial crime threats in the UAE. As the country expands its global trade networks and strengthens its position as a logistics hub, criminals are increasingly using trade transactions to disguise illicit funds.

In 2025, UAE regulators—including the Ministry of Economy, AMLD, and Customs authorities—have sharpened their focus on detecting TBML schemes. This means businesses, accounting firms, and compliance officers must understand how TBML works and what new warning signs to look out for.

This guide explains the new red flags for 2025, how TBML links to broader AML risks, and what UAE firms must implement to stay compliant. Swenta, as an audit and accounting firm, supports businesses in assessing and strengthening their AML frameworks.

Why Criminals Still Target Real Estate — and Why This Matters for TBML

Before diving into trade risks, it’s essential to understand a key pattern:
Criminals use high-value sectors—like real estate—to place and integrate illicit funds because:

1. High-value assets allow large amounts of money to flow quickly.

One purchase can disguise millions in illegal funds.

2. Real estate historically had less monitoring than banking.

This made it easier to hide beneficial ownership or the true source of funds.

3. Complex structures obscure responsibility.

Shell companies, intermediaries, and offshore layers can mask criminal activity.

4. Once money becomes property, tracing becomes difficult.

Authorities often struggle to recover assets post-integration.

These same vulnerabilities apply to TBML—because trade transactions often involve:
✔ multiple parties
✔ cross-border movements
✔ valuation ambiguity
✔ logistics layers
✔ offshore companies

The more complex the transaction, the easier it becomes to hide illegal value transfers.

The Risk-Based Approach (RBA) for TBML: A 2025 Requirement

Regulators now expect companies involved in trade, logistics, import-export, brokering, or corporate services to adopt a Risk-Based Approach (RBA).

An RBA requires firms to:

• Identify high-risk clients, partners, and jurisdictions

• Assess the purpose and nature of trade transactions

• Apply enhanced checks to unusual or complex trade structures

• Verify legitimacy of goods, invoices, and pricing

• Continuously monitor trade flows and documentation

Following FATF guidance, the UAE mandates that all firms engaged in trade-related activities prioritize high-risk transactions for deeper review.

AML consultants in Dubai assist companies in developing and implementing practical RBA models tailored for trade.

TBML Red Flags UAE Firms Must Watch in 2025

Here are the most critical warning signs regulators expect UAE companies to detect this year:

1. Over- or Under-Invoicing

Criminals manipulate the price of goods to illegally move value.

Red flags include:

• Prices far above or below market norms

• Unusual pricing for simple or common goods

• Major invoice inconsistencies between parties

2. Phantom Shipments

Goods that exist only on paper.

Examples:

• No shipping records despite documentation

• Mismatched cargo quantities

• Transport routes without corresponding logistics data

3. Misclassification of Goods

Declaring luxury items as cheap products—or vice versa.

This tactic helps criminals bypass duties or hide illicit value transfers.

4. Repeated Circular Trade

Goods moving through multiple jurisdictions unnecessarily.

This creates complexity to obscure the true origin of funds.

5. Use of High-Risk Jurisdictions

Countries with weak enforcement, low transparency, or sanctions exposure.

Businesses must screen all trading partners carefully.

6. Payments From or To Unrelated Third Parties

When the payer has no role in the commercial transaction, it strongly indicates ML risk.

7. Incomplete or Contradictory Documentation

Such as:

• Missing packing lists

• Conflicting invoices

• Altered shipping documents

• Unexplained amendments

8. Goods Mismatched With the Client’s Business Activity

Example:
A consulting firm suddenly importing electronics without a commercial reason.

The Role of KYC in Detecting TBML

Just like in real estate or corporate services, Know Your Customer (KYC) plays a critical role in preventing TBML.

Businesses must verify:
✔ the identity of trading partners
✔ beneficial ownership
✔ legitimacy of commercial activities
✔ source of funds for trade deals
✔ expected transaction patterns

If anything appears inconsistent, Enhanced Due Diligence (EDD) is required.

Ongoing Monitoring: A Must in 2025

AML obligations do not end after onboarding.

Regular monitoring involves:

• Reviewing invoices and contracts

• Assessing unusual shipments

• Evaluating patterns across multiple trades

• Tracking payment behavior

• Checking for sudden changes in supply chain routes

If suspicious activity is detected, firms must file a Suspicious Transaction Report (STR) through goAML.

Why Supervisors Are Increasing TBML Enforcement

The AMLD and other authorities have increased TBML supervision for several reasons:

1. The UAE’s expanding trade economy

High volumes attract complex financial crime.

2. Increased FATF expectations

Post-FATF evaluations require robust, proven AML enforcement.

3. Growth of emerging, underregulated sectors

New trading firms may lack AML controls and inadvertently enable illegal flows.

4. Rise in cross-border digital commerce

Online transactions and digital trade documentation add complexity.

Supervisors expect firms to tighten internal controls, improve staff training, and use technology to identify abnormalities.

Swenta supports UAE companies in establishing the right frameworks and internal checks to meet these expectations.

Practical Steps UAE Firms Should Take Now

To reduce TBML risk, companies should implement:

✔ Clear trade compliance workflows

From documentation review to payment verification.

✔ Automated screening tools

To check:

• partners

• shipments

• documents

• jurisdictions

✔ Internal red flag escalation procedures

Staff must know how to report concerns internally.

✔ Regular AML training for trade and finance teams

✔ Strong record-keeping systems

Accurate and accessible data helps satisfy regulatory expectations.

✔ Engagement with AML advisors in UAE

Experts can help classify risk levels and build TBML prevention mechanisms.

Trade-Based Money Laundering is evolving rapidly—and so are regulatory expectations. UAE businesses must strengthen their AML frameworks, reinforce their documentation practices, and use RBA principles to identify new TBML red flags.

With enforcement rising and global scrutiny increasing, firms cannot afford weak compliance. Working with professional advisors like Swenta helps businesses build strong systems that protect them from penalties and reputational damage.