Customer Behaviour That Raises AML Concerns

Introduction

In AML compliance, it is not only transactions that matter—customer behaviour often reveals more about potential risks than the financial activity itself. Customers attempting to hide their true intentions may exhibit patterns of behaviour that serve as red flags for money laundering (ML) or terrorist financing (TF).

For DNFBPs, banks, and compliance professionals in the UAE, recognizing these behavioural indicators is essential to comply with Federal Decree-Law No. 20 of 2018, Cabinet Decision No. 10 of 2019, and Cabinet Decision No. 109 of 2023.

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1. Secrecy and Evasiveness

• Avoiding or delaying submission of KYC/UBO documents.

• Refusing to disclose source of funds or wealth.

• Providing vague, incomplete, or inconsistent information.

• Relying heavily on intermediaries or third parties instead of engaging directly.

🔎 Risk: Customers attempting to obscure their true identity or ownership.

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2. Nervous or Suspicious Behaviour

• Showing unusual nervousness during onboarding or questioning.

• Overexplaining simple transactions to deflect scrutiny.

• Frequently changing the story or justification for transactions.

• Avoiding in-person meetings, preferring only remote communication.

🔎 Risk: Customers fearing exposure of illicit activities or false documents.

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3. Aggressive or Coercive Attitudes

• Arguing that compliance checks are “unnecessary.”

• Comparing firms: “Other banks don’t ask these questions.”

• Threatening to move business elsewhere if compliance is enforced.

• Displaying hostility or pressure tactics toward staff.

🔎 Risk: Attempt to intimidate compliance teams and bypass controls.

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4. Unusual Payment Preferences

• Strong preference for large cash payments, even where digital alternatives exist.

• Requesting to split transactions into smaller amounts (“structuring”).

• Insistence on using third-party payers or unrelated accounts.

• Sudden switching to cryptocurrency or prepaid instruments.

🔎 Risk: Indicators of structuring, layering, or obscuring money trail.

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5. Frequent Changes and Inconsistencies

• Switching bank accounts or financial institutions repeatedly.

• Frequent restructuring of ownership or control of entities.

• Transactions inconsistent with declared business profile.

• Providing contradictory answers during different interactions.

🔎 Risk: Signs of concealment or layering activity.

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6. UAE-Specific Examples

• Gold & Jewellery: Customers insisting on cash purchases without invoices.

• Real Estate: Buyers reluctant to register UBO when using offshore entities.

• Professional Services: Clients requesting secrecy in company formations.

• Virtual Assets: Customers demanding anonymity in crypto transfers.

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7. Mitigation Steps for Businesses and DNFBPs

• Train staff to identify and escalate suspicious behaviours.

• Maintain detailed records of client interactions.

• Apply Enhanced Due Diligence (EDD) when behavioural red flags appear.

• Screen customers continuously against PEP and sanctions lists.

• File Suspicious Activity Reports (SARs) via goAML when justified.

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✅ Conclusion

Customer behaviour often provides the earliest warning signs of potential ML/TF activity. By observing how clients interact, provide documents, and respond to compliance requirements, UAE businesses can detect suspicious activity early, protect their reputation, and remain compliant with AML laws.

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📌 About Us

At Sheikh Anwar Accounting & Auditing LLC, we specialize in AML compliance, risk-based monitoring, outsourced MLRO services, and regulatory reporting. Our expertise ensures UAE businesses are fully equipped to identify behavioural red flags and manage AML risks effectively.

📧 Email: info@sa-auditors.com

🌐 Website: www.sa-auditors.com