This week in one line: The US and the CBUAE are tightening Iran-linked controls from both ends, and from 1 October the FTA expects you to document that you've verified your suppliers.
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Top story
Iran sanctions now run through the UAE
On 1 October, OFAC designated three UAE-based entities as part of the US Treasury's Operation Economic Outcast: Integrated Auto Parts LLC, Silver Line Metal Trading LLC and Traco International FZE. OFAC says Integrated Auto Parts facilitated auto parts shipments via the UAE to Iran, importing parts transshipped from companies in Türkiye and India, and that Silver Line sells stainless steel products to Iranian steel producers. The same action added two sectoral determinations that authorise OFAC to sanction any entity or individual operating in Iran's automotive or rail sectors.
Locally, The National reports that the CBUAE barred all Bank Melli Iran branches in the UAE from any transactions to and from Iran, including trade finance, after finding violations of AML/CFT rules. The same report says this followed the UAE's own suspension of all trade, commercial exchange and financial transactions with Iran in August.
Sources: US Treasury | OFAC recent actions | The National
So what? OFAC's description points to transshipment: parts from Türkiye and India passing through the UAE on the way to Iran. Review customers that import and re-export auto parts or steel products, and check trade documents for end-user and destination inconsistencies. With the UAE having suspended trade with Iran itself, Iran-linked flows are now a local concern as well as a US one. Treasury also warns that foreign banks that knowingly facilitate significant transactions for designated persons risk restrictions on their US correspondent accounts.
Relevant if you're a bank, trader or DNFBP with Iran-adjacent trade.
Also this week
Supplier checks now sit behind your VAT recovery
From 1 October, FTA Decision No. 13 of 2026 requires businesses to verify their suppliers, and each supply they receive, before deducting input VAT, and to keep a record of the checks. KPMG explains that, under Article 54(bis) of the VAT Law, the FTA can deny recovery where the checks weren't carried out and it establishes that the input tax relates to a supply chain involving tax evasion. KPMG does not expect the requirements to apply more broadly, but says they offer useful guidance on governance controls.
Sources: FTA Decision No. 13 | KPMG UAE
So what? The exposure is VAT you can't recover if a supply chain is linked to tax evasion and you can't show the checks. Compliance, finance and procurement now share the control. KPMG suggests assessing whether your supplier onboarding, procurement, accounts payable and VAT return review processes can evidence the checks.
Relevant if you're VAT-registered.
An ADGM licence doesn't cover the DIFC
The DFSA fined ADGM-licensed Vault Wealth $109,200 (Dh401,000), saying it provided financial services in or from the DIFC without DFSA authorisation. According to the DFSA, between February and May 2024, its staff worked from the offices of a related, unregulated DIFC company, where prospective clients were invited, advised and onboarded. The DFSA said senior management knew authorisation was required and did not act on concerns raised by the firm's then Compliance Officer, and treated both as aggravating factors.
Source: DFSA
So what? The DFSA looks at where activity happens, not just where a firm is licensed. If you operate in both ADGM and DIFC, check where client-facing staff sit and meet clients, and make sure licensing concerns raised by compliance are escalated and acted on.
Relevant if you're a firm with ADGM and DIFC entities.
On the radar
- Türkiye's fund crisis: according to Bloomberg on 18 September, Türkiye's Capital Markets Board ordered 131 investment funds into liquidation, with İşbank and state-owned Ziraat Bank overseeing it. The funds hold more than $18 billion and have hundreds of thousands of investors. The story is still developing. If you have Turkish-linked clients or counterparties, check for exposure to the affected funds. Bloomberg
- UAE's third National Risk Assessment: according to Khaleej Times, it draws on data from 84 federal and private entities and examines more than 20 sectors and 21 categories of predicate offences. The National Committee says results will be shared with authorities and the private sector to align risk management practices. Khaleej Times
Action of the week
Ask finance and procurement who signs off supplier verification for input VAT, and where it's documented.
SignPath Weekly is for general information only and is not legal, regulatory, tax, financial or compliance advice. It summarises the public sources linked in each item and may contain errors or become outdated, so check the primary source and take professional advice before acting. References to named companies report public actions as stated in the cited sources. The views expressed are the author's own and not those of any employer or organisation. To the fullest extent permitted by law, the author accepts no liability for loss arising from reliance on this newsletter. Spotted an error? Reply and I'll review and correct it.