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Common AML Violations Found During MOE Inspections

📅 December 29, 2025 ⏱ 🏢

MOE inspections in the UAE consistently uncover the same AML weaknesses, especially around KYC, risk assessments, and suspicious transaction reporting. Most violations stem from poor implementation, not lack of awareness, and are preventable with basic controls and documentation.

Common AML Violations Found During MOE Inspections

This article focuses on recurring AML compliance failures identified during inspections conducted by the Ministry of Economy (MOE). These inspections mainly target DNFBPs, including precious metals dealers, real estate brokers, auditors, and corporate service providers.

The findings below are drawn from enforcement trends, inspection feedback, and regulatory guidance issued under UAE AML laws.

1. Inadequate AML Risk Assessments

What MOE commonly finds

  • No documented enterprise-wide AML risk assessment

  • Generic templates copied without customization

  • Risk assessments not updated to reflect:

    • New products or services

    • New geographies or counterparties

    • Changes in customer profile

Why this matters

  • UAE law requires a risk-based approach

  • Without a proper risk assessment, all other AML controls are considered weak by default

Regulatory relevance

  • Required under Federal Decree-Law No. 20 of 2018

  • Further detailed in Cabinet Decision No. 10 of 2019

2. Weak or Incomplete Customer Due Diligence (CDD)

Common deficiencies

  • Missing or expired identification documents

  • Failure to verify:

    • Beneficial owners

    • Shareholding structures

  • No documented purpose or nature of the business relationship

  • Reliance on verbal information without evidence

High-risk red flags often ignored

  • Cash-heavy customers

  • Non-resident or foreign clients

  • Unusual ownership structures

MOE expectation

  • CDD must be completed before establishing a business relationship

  • Ongoing review is mandatory, not optional

3. Failure to Apply Enhanced Due Diligence (EDD)

Typical violations

  • High-risk customers treated the same as low-risk ones

  • No additional checks for:

    • Politically Exposed Persons (PEPs)

    • High-risk jurisdictions

    • Large or complex transactions

What EDD should include

  • Source of funds verification

  • Source of wealth analysis

  • Senior management approval

  • Increased transaction monitoring

Inspection outcome

  • MOE frequently cites this as a serious compliance failure, not a minor gap

4. Poor Transaction Monitoring

Observed issues

  • No documented transaction monitoring process

  • Monitoring done manually with no defined thresholds

  • Staff unable to explain how suspicious activity is identified

Common warning signs missed

  • Transactions inconsistent with customer profile

  • Rapid movement of funds or assets

  • Repeated high-value transactions just below reporting thresholds

Key point

  • Monitoring must be ongoing and risk-based, not a one-time review at onboarding

5. Failure to File Suspicious Transaction Reports (STRs)

One of the most frequent violations

What MOE finds

  • No STRs filed despite obvious red flags

  • Businesses waiting for “proof” instead of suspicion

  • Lack of internal escalation procedures

Legal reality

  • Suspicion alone is sufficient to trigger reporting

  • Failure to file STRs is a direct breach of UAE AML law

Relevant authority

  • STRs must be filed with the Financial Intelligence Unit via the goAML platform

6. Inadequate AML Policies and Procedures

Common problems

  • Policies not aligned with actual business activities

  • Outdated documents referencing repealed laws

  • Policies exist on paper but are not implemented

MOE inspection focus

  • Inspectors often test whether staff understand and apply the policies

  • A policy no one follows is treated as non-existent

7. Lack of AML Training

Frequent findings

  • No formal AML training program

  • Training not documented

  • Frontline staff unaware of:

    • Red flags

    • Reporting obligations

    • Their role in AML compliance

Regulatory expectation

  • Training must be:

    • Periodic

    • Role-specific

    • Properly recorded

8. Poor Record Keeping

Typical failures

  • Customer records not retained for the required period

  • Missing transaction records

  • Inability to retrieve documents promptly during inspection

Legal requirement

  • AML records must generally be retained for at least five years

  • Records must be accessible without delay

9. No Designated Compliance Officer or Weak Oversight

Issues identified

  • No formally appointed AML Compliance Officer

  • Compliance role assigned but with no authority or knowledge

  • Lack of senior management involvement

MOE position

  • AML compliance is a management responsibility, not just an operational task

Key Takeaways from MOE Inspections

  • Most violations are systemic, not accidental

  • Regulators focus on:

    • Implementation

    • Evidence

    • Consistency

  • “We didn’t know” is not accepted as a defense

Regulatory References (UAE)

  • Federal Decree-Law No. 20 of 2018 – Primary AML legislation

  • Cabinet Decision No. 10 of 2019 – AML/CFT framework and obligations

  • Ministry of Economy – Supervisory authority for DNFBPs

  • Financial Intelligence Unit – STR reporting authority

Entity Responsibilities

If your business is subject to MOE supervision:

  • Conduct a mock MOE inspection internally

  • Review your AML risk assessment and EDD files

  • Test whether staff can explain AML procedures in plain language

MOE inspections are no longer box-ticking exercises. They are enforcement-driven, evidence-based, and increasingly strict.