Money laundering remains one of the most serious financial crimes affecting global markets, and the UAE continues to strengthen its regulatory framework to combat it. One of the most complex stages of this crime is layering—a stage where illicit funds are moved, disguised, and obscured so the original source becomes difficult or nearly impossible to identify.

For DNFBPs (Designated Non-Financial Businesses and Professions) like real estate brokers, accountants, auditors, dealers in precious metals, and corporate service providers, understanding how layering works is crucial for compliance. Many businesses rely on professional accounting and audit firms—such as Swenta—to support them in meeting AML obligations and designing strong internal controls.

This article explains what layering is, how it works, why the real estate sector is heavily targeted, and why a risk-based approach is critical for all professionals handling high-value transactions.

What Is Layering in Money Laundering?

Layering is the second stage of the money laundering cycle. After illegal money has been placed into the financial or commercial system, criminals begin the layering phase to create distance between the funds and their criminal origin.

Layering typically involves:

• Complex transactions

• Multiple bank accounts

• Cross-border transfers

• Use of shell companies

• Rapid movement of funds

• Investing in assets, especially real estate

The primary goal is confusion—to bury the audit trail so deeply that tracing the money becomes extremely challenging for authorities.

In the UAE, where real estate and corporate services are major components of the economy, this stage poses significant risk to DNFBPs.

Why Real Estate Is a Preferred Tool for Layering

Real estate transactions are one of the most attractive methods for layering due to several strategic advantages:

1. High-Value Transactions

A single property purchase can absorb millions of dirhams, allowing criminals to move large sums quickly and discreetly.

2. Lesser Oversight Than the Banking Sector

While banks follow strict KYC and verification processes, real estate traditionally had fewer checks. This made it easier for criminals to:

• Mask beneficial ownership

• Use nominees or third-party buyers

• Route funds through offshore entities

3. Assets Are Harder to Seize

Once money is converted into property:

• The value appears legitimate

• The asset can be resold later

• Tracing becomes harder

In several regions worldwide, unchecked criminal activity has even pushed property prices beyond the reach of local populations—triggering social and economic consequences. What begins as financial crime ends up shaping cities and impacting community stability.

Using a Risk-Based Approach (RBA) to Combat Layering

A Risk-Based Approach is essential for detecting layering activity. Instead of treating every customer or transaction the same, businesses must evaluate:

• The type of client

• The nature of the transaction

• Geographic risks

• Behavioral patterns

According to FATF guidelines, all countries must ensure DNFBPs implement an RBA to identify and mitigate money laundering risks.

For many UAE-based companies, AML consultants and accounting firms—such as Swenta—help design and apply an effective RBA tailored to industry needs.

Key RBA Steps for Real Estate & DNFBPs

To detect layering red flags and comply with UAE AML laws, professionals should implement the following core measures:

1. Conduct Thorough KYC

Identify:

• Buyer and seller identities

• Ultimate Beneficial Owner (UBO)

• Any intermediaries involved

Even if a representative makes the transaction, the real owner of the funds must be identified.

2. Understand the Purpose & Background of the Deal

Professionals should assess:

• Why the client is buying or selling

• Whether the pricing seems unrealistic

• If the transaction structure is unusually complex

Unexplained urgency or lack of transparency are common layering red flags.

3. Trace the Source of Funds

This includes verifying:

• The legitimacy of financial documents

• The origin of the funds

• Whether cash or offshore transfers are involved

Suspicious patterns require enhanced due diligence.

4. Monitor Ongoing Relationships

If the client regularly engages in high-value transactions, patterns must be monitored to detect changes that might indicate layering.

5. Involve AML Consultants

AML specialists in the UAE can support:

• Policy development

• goAML reporting

• Risk assessment frameworks

• Employee training

• Internal monitoring systems

Accounting and audit firms like Swenta assist DNFBPs in building reliable compliance structures that minimize legal exposure.

The Role of UAE Supervisors and Regulators

Real estate professionals and DNFBPs cannot tackle money laundering alone. Strong oversight from regulators is essential.

In the UAE, the Anti-Money Laundering and Combating the Financing of Terrorism Supervision Department (AMLD) under the Central Bank of the UAE (CBUAE) serves as the primary authority.

Their responsibilities include:

• Issuing AML guidelines

• Conducting inspections

• Enforcing penalties

• Providing sector-specific training

• Ensuring goAML reporting compliance

Growing sectors require additional focus so criminals cannot exploit inexperienced players.

Challenges in Weak or Emerging Real Estate Markets

In developing or rapidly expanding property markets, the risk of layering is even higher. Regulators pay close attention to:

• Newly formed real estate firms

• Agencies with insufficient AML knowledge

• Regions with historically weak enforcement

Without proper controls, these markets can become hotspots for criminal activity.

Practical Steps DNFBPs Should Take in 2025

To stay compliant and reduce exposure to layering risks, organizations should implement the following:

• Develop detailed due diligence checklists

• Use automated tools to detect suspicious patterns

• Train staff consistently on AML obligations

• Establish clear internal procedures for red flags

• Monitor client activity continuously

• Seek support from professional AML advisors in the UAE

Strong controls protect businesses from penalties, reputational harm, and regulatory action.

Layering is one of the most complex and dangerous stages of money laundering, and DNFBPs in the UAE must understand how criminals use real estate and commercial channels to disguise illicit funds. By applying a strong risk-based approach, improving due diligence, and working with specialized accounting and AML firms—such as Swenta—businesses can significantly reduce their exposure to regulatory violations.

With the UAE intensifying AML enforcement in 2025, now is the time for DNFBPs to strengthen their systems, train their teams, and adopt modern compliance frameworks to ensure long-term safety and growth.