Supplier Verification & Integrity Due Diligence: Moving Beyond Compliance

The UAE's tax and regulatory landscape continues to evolve, with increasing expectations around transparency, governance, and accountability. A recent development, FTA Decision No. 13 of 2026, reinforces the importance of supplier verification and integrity due diligence as part of an organization's control environment, with the requirements becoming effective from 1 October 2026.

While much of the discussion has focused on VAT implications, the broader message is one that investigators, fraud examiners, and compliance professionals have advocated for years: 

Organizations must know who they are doing business with.

From Documentation to Verification

Historically, supplier onboarding has often been treated as an administrative process involving:

• Trade licence collection
• VAT registration verification
• Bank account details
• Contracts and purchase orders

However, regulatory expectations are increasingly moving beyond document collection towards understanding the legitimacy, existence, and integrity of the supplier relationship itself.

This principle is not new.

As a Certified Fraud Examiner (CFE) and Certified Anti-Money Laundering Specialist (CAMS), I have spent a significant part of my career conducting corporate investigations, background checks, integrity due diligence reviews, fraud examinations, regulatory compliance assessments, and financial crime investigations.

One recurring theme across many of these engagements is that organizations often rely on documentation without independently validating the substance behind it.

What Investigations Have Taught Us

Over the years, we have assisted clients across various sectors in identifying and mitigating risks associated with suppliers, contractors, business partners, and other third parties.

Common issues identified during investigations and due diligence assignments include:

• Suppliers that exist only on paper
• Undisclosed conflicts of interest
• Hidden beneficial ownership structures
• Related-party transactions
• Fictitious invoicing arrangements
• Suppliers with adverse regulatory or reputational histories
• Weak vendor onboarding and monitoring controls

In many cases, the warning signs existed long before the issue materialized into a financial loss, regulatory concern, or reputational challenge.

The lesson is simple: collecting documents is not the same as conducting due diligence.

Supplier Verification is Good Business Practice

Effective supplier verification is not merely a compliance exercise. It is a fundamental component of risk management and good governance.

A robust supplier due diligence program should seek to answer critical questions:

• Is the supplier genuinely operating the business it claims to conduct?
• Who ultimately owns and controls the entity?
• Does the supplier have a legitimate commercial presence?
• Are there any integrity, fraud, or reputational concerns?
• Are transactions commercially justifiable and consistent with the supplier's activities?
• Have any risk indicators been identified that warrant enhanced scrutiny?

These are the same questions that form the basis of sound investigative and compliance practices globally.

A Risk-Based Approach

Not all suppliers carry the same level of risk.

Organizations should adopt a risk-based approach to supplier verification, with enhanced scrutiny applied where higher-risk indicators are identified.

Depending on the nature of the relationship, due diligence procedures may include:

• Corporate background checks
• Beneficial ownership verification
• Integrity and reputational screening
• Regulatory and legal record reviews
• Site visits and operational verification
• Sanctions and AML screening
• Ongoing monitoring of higher-risk suppliers

Most importantly, organizations should maintain clear documentation supporting the due diligence performed and the conclusions reached. This creates an audit trail and demonstrates that reasonable care has been exercised.

How Baker Tilly UAE Can Help

At Baker Tilly UAE, supplier verification and integrity due diligence have long been integral parts of our risk advisory and investigative services.

Drawing on our extensive experience in:

• Corporate investigations
• Fraud risk assessments
• Integrity due diligence
• Background verification
• AML and financial crime compliance
• Forensic accounting
• Regulatory risk advisory

We help organizations understand who they are doing business with and identify risks before they become costly issues.

Our multidisciplinary approach combines investigative expertise, forensic analysis, regulatory knowledge, and practical business insight to deliver risk-based supplier verification frameworks that are both effective and commercially pragmatic.