Dubai property market a minefield of laundering, scams, and sanctions evasion

The Dubai real estate market has long been a popular destination for foreign investors, with its attractive tax and investment incentives, luxurious lifestyle offerings and rapid development. However, Radha Stirling, CEO of Detained in Dubai and Due Process International, warns that investors must be aware of the risks associated with the Dubai property market, particularly relating to money-laundering, sanctions evasion, and other dangers.

“There have been several high-profile cases in recent years,” Stirling says, “The Financial Action Task Force (FATF), an intergovernmental body established to combat money laundering, has identified Dubai as a high-risk jurisdiction for money laundering and terrorist financing. The country's lack of effective anti-money laundering measures and weak regulatory environment make it an attractive destination for organised criminal groups to hide illicit funds.

“Criminals use the Dubai property market to transfer funds from one location to another, disguise the origin of the funds and invest the proceeds of their criminal activities in legitimate assets. This has only become easier as the major property development companies in UAE began accepting payment in cryptocurrency. The supply of apartments and homes in Dubai far exceeds demand, and property valuations are disconnected from market realities; meaning the real estate sector in the Emirates is quite unambiguously offering properties as instruments for legitimising illicit money. It is an open secret in Dubai.”