How to Structure Payments to Avoid Delays Under UAE’s AML Regime

Is your UAE business struggling with cash flow and project delays due to slow payment processing by banks?

Such delays frequently occur due to incomplete or inconsistent beneficiary details, payment purpose, or supporting documents.

Having all the payment details right and well documented can keep your transfers flowing smoothly, safeguard cash flow, and avoid regulatory nightmares. Here, we'll illustrate how to set up payments under the UAE's AML regime to sidestep delays, remain compliant, and maintain business efficiency.

What are Delayed Payments 

A delayed payment is when a transfer fails to arrive at the beneficiary on time since the bank or regulator has retained it for further checks, missing details, or not complying in full with the UAE's Anti-Money Laundering (AML) conditions.

How Delayed Payments Impact Businesses in UAE

The UAE’s AML laws (Federal Decree-Law No. 20 of 2018 and Cabinet Decision No. 10 of 2019) require banks to check every transfer for complete details, who is sending it, who is receiving it, and why it’s being made. If anything is missing or unclear, banks must pause or return the payment until the information is fixed. 

Businesses often face slowdowns due to mandatory anti–money laundering checks, which, while critical for compliance, can disrupt smooth financial operations.

Here's the way those delays appear in practice:

• Cash flow lapses – salaries, rent, or supplier invoices get hung up when payments are withheld pending checks.

• Project delays – suppliers won't deliver until invoices or contracts are cleared by the bank.

• Additional funding expense – companies cover delays with overdrafts or loans, increasing expenses. 

• Regulatory risk – lost documents or delayed replies can even initiate penalties.

Briefly: in UAE law, only if all the details are traceable and backed does the payment run smoothly. Gaps in records or documents result in delays directly.

What are the Most Common Reasons for Late Payments?

Payment delays can ensnare even the most diligent companies. In the UAE, such disruptions rarely happen randomly, they typically stem from identifiable, avoidable issues. Having this knowledge in advance allows you to refine your procedures before the bank steps in, sparing you time, money, and extraneous frustration.

The most frequent reasons for delayed payments for UAE companies are:

• Incomplete or inaccurate beneficiary information (IBAN, name, license number, address).

• Unclear or incomplete purpose of payment descriptions.

• Further AML/KYC screening for higher-risk or suspicious transactions.

• Supporting documents not prepared or contrary to payment instructions.

• Crossing payment limits (e.g., more than AED 3,500) without including all necessary information.

• Typos, misspelled account names, or incorrect references due to human error.

• Ineffective internal procedures or employees not adhering to compliance procedures.

• Bank system delays caused by cut-off times, holidays, or first-time beneficiary checks.

Ways to Structure Payments to Avoid Delays

1. Maintain a payment log – every transfer linked to documents.

Adhering to these practices ensures each payment clears without issues, remains AML-compliant, and prevents expensive delays for your company.

1. Keep paperwork ready for every payment

Incomplete documentation is one of the most prevalent reasons that payments are delayed in the UAE.

Banks and institutions are bound by the Central Bank's AML directive to ensure that every transfer is for a valid business transaction. If you start a payment without any supporting documents, the bank will hold it until the documents are produced.

For instance, if you are paying a supplier's invoice, the bank can request the purchase order and the invoice itself. If paying salaries, payroll records or your WPS (Wage Protection System) files might be requested.

So before initiating any transfer, ensure that the contract, invoice, or payroll sheet is already on file. This not only shortens bank reviews but also demonstrates that your business maintains a transparent audit trail, something regulators in the UAE have repeatedly emphasized.

2. Use only regulated channels

Under the UAE’s AML regime, banks and licensed financial institutions are the only safe conduits for business transactions. Transfers routed through cash or unlicensed middlemen are automatically treated as high risk, and in many cases, blocked.

When structuring payments, businesses should:

• Avoid cash transactions. 

• Stick to UAE-based banks or approved providers.

• Consider escrow accounts for large or staged deals. These accounts are regulated and give both parties confidence that funds are being handled correctly.

3. Fill out all payment details completely

Payment instructions that are incomplete or abbreviated are one of the simplest, yet most frequent, triggers for delays in the UAE. Under Central Bank standards, every transfer must include the full beneficiary and sender information (not partial names, not initials, not vague addresses.)

Even small errors can hold up a transaction, like:

• Writing “ABC Trading” instead of “ABC Trading LLC, Dubai, UAE”

• Omitting the beneficiary’s full address

• Leaving out the International Bank Account Number (IBAN)

When these details are missing, the receiving bank is obliged to reject the payment or return it for clarification. To avoid such setbacks:

• Use official records. Copy beneficiary details exactly as they appear on trade licenses or official contracts.

• Always include IBANs. For UAE-based accounts, IBANs are mandatory — skipping them will automatically trigger a rejection.

• Standardize templates. Have your finance team use pre-approved templates for recurring payments to minimize data-entry errors.

4. State the purpose clearly

In the UAE, every transfer must show why the money is being moved. Banks are obliged to check that the stated purpose of a transaction makes sense for the business profile of the sender and receiver. If the purpose is vague or missing, the payment is likely to be flagged and delayed.

• Purpose codes are mandatory. All wire transfers in the UAE must include a three-character code that categorizes the payment (e.g., “SAL” for salary, “RNT” for rent, “INV” for supplier invoice). Transfers without these codes are often returned.

• Generic descriptions raise red flags. Writing “business expense” or “miscellaneous” offers no clarity. Banks will pause the payment and ask for supporting documents.

• Mismatch issues. If a company licensed for trading textiles suddenly sends a large transfer marked “real estate investment,” it will almost certainly attract extra scrutiny.

5. Share sender details for bigger transfers

Any transfer above AED 3,500 requires complete sender information. It is mandated by UAE regulations. Make sure your finance team always includes your business license number, registered address, and full account name in the transfer details. When this is missing, the receiving bank will stop the funds until they can verify who you are.

6. Record the reason behind each transfer

Most payment delays happen because companies can't generate this "paper trail" at a moment's notice.

UAE regulators want to see companies prove that each payment has a valid, documented cause. If a bank, auditor, or regulator requests you to explain a transfer several months later, you must be able to present it quickly.

• Keep a payment log. Track the date, amount, payee, and reason for each transfer in a plain, centralized system.

• Link to source documents. Staple or paper-clip copies of contracts, invoices, or payroll sheets to each entry in the log.

• Check regularly. Periodically review to make sure your records match the transfers reflected on your bank statements.

Avoid Payment Delays with AML-Compliant Processes

Delayed payments may trigger cash flow disruptions, hindered projects, and undue regulatory threats to UAE businesses. Avoidable delays in most instances can occur with the aid of proper procedures, full documentation, and steadfast adherence to the UAE's AML regulations.

CFO Bridge virtual CFO services enable companies to incorporate these best practices, so each payment is accurately documented, compliant, and processed smoothly. Their professionals take you through AML mandates, implement strong payment workflows, and track compliance, so you can concentrate on growing your business while avoiding delays or fines.

Speak with CFO Bridge's experts today to automate your payments, remain AML-compliant, and prevent expensive delays.