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  • Section 3 Customer Due Diligence (CDD)

    • Article (5)

      1. Financial Institutions and DNFBPs are required to undertake CDD measures to verify the identity of the Customer and the Beneficial Owner before or during the establishment of the business relationship or opening an account, or before executing a transaction for a Customer with whom there is no business relationship. And in the cases where there is a low crime risk, it is permitted to complete verification of Customer identity after establishment of the business relationship, under the following conditions:
         
        1. The verification will be conducted in a timely manner as of the commencement of business relationship or the implementation of the transaction.
           
        2. The delay is necessary in order not to obstruct the natural course of business.
           
        3. The implementation of appropriate and effective measures to control the risks of the Crime.
           
      2. Financial Institutions and DNFBPs are required to take measures to manage the risks in regards to the circumstances where Customers are able to benefit from the business relationship prior to completion of the verification process.
         

    • Article (6)

      Financial Institutions and DNFBPs should, as the case may be, undertake CDD measures in the following cases:

      1. Establishing the business relationship;
         
      2. Carrying out occasional transactions in favour of a Customer for amounts equal to or exceeding AED 55,000, whether the transaction is carried out in a single transaction or in several transactions that appear to be linked;
         
      3. Carrying out occasional transactions in the form of Wire Transfers for amounts equal to or exceeding AED 3,500.
         
      4. Where there is a suspicion of the Crime.
         
      5. Where there are doubts about the veracity or adequacy of previously obtained Customer's identification data.
         

    • Article (7)

      Financial Institutions and DNFBPs should undertake CDD measures and ongoing supervision of business relationships, including:

      1. Audit transactions that are carried out throughout the period of the business relationship, to ensure that the transactions conducted are consistent with the information they have about Customer, their type of activity and the risks they pose, including - where necessary - the source of funds
         
      2. Ensure that the documents, data or information obtained under CDD Measures are up-to-date and appropriate by reviewing the records, particularly those of high-risk customer categories
         

    • Article (8)

      1. Financial Institutions and Designated Non-Financial Businesses and Professions shall recognize the identity of Client the client, whether permanent or occasional, and whether he/ she is a natural or juridical person or a legal arrangement they must also verify his/ her identity, using original documents, data or information from a reliable and independent source, as follows:
         
        1. As for natural persons:

          Name as shown in the identity or travel document, the nationality, the address, the place of birth and, where applicable, the name and address of the employer, with an attached original copy of the valid identity card or travel document.
           
        2. As for juridical persons and legal arrangements:
           
          1. the Name, the legal form, and Articles of Incorporation.
             
          2. The address of the head office or the principal place of business, and if the person is a foreigner, the name and address of his/ her legal representative in the state, if any, shall be stated and the relevant supporting documents shall be submitted.
             
          3. Articles of Association or any other similar approved documents.
             
          4. The names of the relevant persons who hold senior management positions with the juridical person or legal arrangement.
             
      2. Financial Institutions and Designated Non-Financial Businesses and Professions shall verify that any person who is acting on behalf of the ClientClient is authorized to do so, and shall identify such person in the manner provided for in clause no. (1) of this article.
         
      3. Financial Institutions and Designated Non-Financial Businesses and Professions shall understand the purpose and nature of the business relationship and obtain information related to this purpose when needed.
         
      4. Financial Institutions and Designated Non-Financial Businesses and Professions shall understand the nature of the Clientclient's business and the ownership and control structure of the Client.
         
      This article has been amended by Cabinet Resolution No. (24) of 2022. You are viewing the latest version. To view the previous version, click the version box below.
      Version 1(effective from 10/02/2019 to 01/04/2022)

       

      1. Financial Institutions and DNFBPs should identify the Customer’s identity, whether the Customer is permanent or walk-in, and whether the Customer is a natural or legal person or legal arrangement, and verify the Customer’s identity and the identity of the Beneficial Owner. This should be done using documents, data or information from a reliable and independent source or any other source to verify the identity verification as follows:
         
        1. For Natural Persons:

          The name, as in the identification card or travel document, nationality, address, place of birth, name and address of employer, attaching a copy of the original and valid identification card or travel document, and obtain approval from the senior management, if the Customer or the Beneficial Owner is a PEP.
           
        2. For Legal Persons and Legal Arrangements:
           
          1. The name, Legal Form and Memorandum of Association
             
          2. Headquarter office address or the principal place of business; if the legal person or arrangement is a foreigner, it must mention the name and address of its legal representative in the State and submit the necessary documents as a proof.
             
          3. Articles of Association or any similar documents, attested by the competent authority within the State.
             
          4. Names of relevant persons holding senior management positions in the legal person or legal arrangement.
             
      2. Financial institutions and DNFBP’s are required to verify that any person purporting to act on behalf of the Customer is so authorised, and verify the identity of that person as prescribed in Clause (1), of this Article.
         
      3. Financial institutions and DNFBP’s are required to understand the intended purpose and nature of the business relationship, and obtain, when necessary, information related to this purpose.
         
      4. Financial institutions and DNFBP’s are required to understand the nature of the Customer’s business as well as the Customer’s ownership and control structure.
         

       

    • Article (9)

      Financial Institutions and Designated Non-Financial Businesses and Professions shall take reasonable measures that take the risks of crime arising from the client Client and business relationship into account, to identify and verify the beneficial owner of juridical persons and legal arrangements, using documents, data or information obtained from a reliable and independent source, as follows:

      1. ClientClients from among juridical persons :

      a- Obtaining the identity of the natural person, whether he/ she works alone or with another person who has an actual controlling share or equity in the juridical person by (25%) or more.
      b-In case of doubt as to the identity of the natural person in accordance with the preceding clause, or as to whether the natural person who has a controlling share or equity is the beneficial owner, or where no natural person exercises control through the equity, the natural person who exercises actual or legal control over the juridical person or legal arrangement shall be identified through any other direct or indirect means.
      c-If no natural person is identified under paragraphs nos. (a) and (b) of this clause, the natural person in question holding the position of Senior Management Officer, whether one or more persons, shall be identified.
       

      2. ClientClients from among Legal arrangements:

      Determing the Trustor or trustee, the beneficiaries or classes of beneficiaries, and any other natural person who exercises ultimate effective control, including through a series of controls or ownership over the trust directly or indirectly, and obtain sufficient information about the real beneficial owner so that he/ she can be identified at the time of payment or when he/ she intends to exercise his / her legally acquired rights.

      With respect to other legal arrangements, they shall recognize the identity of the natural persons holding equivalent or similar positions.

      This article has been amended by Cabinet Resolution No. (24) of 2022. You are viewing the latest version. To view the previous version, click the version box below.
      Version 1(effective from 10/02/2019 to 01/04/2022)

       

      Financial Institutions and DNFBP’s are required to take reasonable measures to verify the identity of the Beneficial Owners of legal persons and Legal Arrangements, by using information, data, or statistics acquired from a reliable source, by the following:

      1. For Customers that are legal persons:

      (a) Obtaining and verifying the identity of the natural person, who by himself or jointly with another person, has a controlling ownership interest in the legal person of 25% or more, and in case of failing or having doubt about the information acquired, the identity shall be verified by any other means.

      (b) In the event of failing to verify the identity of the natural person exercising control as per paragraph (a) of this Clause, or the person(s) with the controlling ownership interest is not the Beneficial Owner, the identity shall be verified for the relevant natural person(s) holding the position of senior management officer, whether one or more persons.

      2. For Customers that are Legal Arrangements:

      Verifying the identity of the Settlor, the Trustee(s), or anyone holding a similar position, the identity of the beneficiaries or class of beneficiaries, the identity of any other natural person exercising ultimate effective control over the legal arrangement, and obtaining sufficient information regarding the Beneficial Owner to enable the verification of his/her identity at the time of payment, or at the time he/she intends to exercise his/her legally acquired rights.

       

    • Article (10)

      Financial Institutions and Designated Non-Financial Businesses and Professions and virtual assets services providers shall be exempt from determining and verifying the identity of the shareholder or partner or the Real Beneficiary, provided that such information is obtained from reliable sources in cases where the Client or owner of the controlling interest is of any of the following:
       

      1. A company that is listed on a regulated securities market and that is subject to disclosure requirements under any means that impose the requirements of adequate transparency for the Real Beneficiary.
         
      2. A subsidiary company whose majority of shares or stocks are owned by a holding company.
         
      This article has been amended by Cabinet Resolution No. (24) of 2022. You are viewing the latest version. To view the previous version, click the version box below.
      Version 1(effective from 10/02/2019 to 01/04/2022)

       

      Financial Institutions and DNFBPs shall be exempted from identifying and verifying the identity of any shareholder, partner, or the Beneficial Owner, if such information is obtainable from reliable sources where the Customer or the owner holding the controlling interest are as follow:

       

      1. A company listed on a regulated stock exchange subject to disclosure requirements through any means that require adequate transparency requirements for the Beneficial Owner.
         
      2. A subsidiary whose majority shares or stocks are held by the shareholders of a holding company.
         

       

    • Article (11)

      1. In addition to the Due Diligence measures required for the ClientClient and the beneficial owner, Financial Institutions must take Due Diligence measures and continuous supervision towards the beneficiary of personal insurance policies and money making operations, including life insurance products, family takaful insurance and other investment insurance products, as soon as the beneficiary is identified or named as follows:
         
        1. As for the named beneficiary, the name of the person must be obtained, whether he/she is a natural or legal person or a legal arrangement.
           
        2. As for the beneficiary identified by category or description such as family relationship such as spouse, children or any other means such as will or estate, sufficient information about the beneficiary must be obtained to ensure that the financial institution will be able to identify the beneficiary when disbursing compensation or benefits.
           
        3. Verifying the identity of the beneficiary in the two previous cases when paying compensation or dues or exercising any rights related to those documents.
           
      2. In all cases, Financial Institutions must consider the clientClient and beneficiary of life insurance policies and family takaful insurance as risk factors when determining the applicability of enhanced due diligence procedures. Moreover, if they find that the beneficiary is a high risk legal person or arrangement, they must take enhanced due diligence measures, which must include reasonable procedures to identify and verify the beneficial owner of the policy beneficiary when paying compensation or dues or exercising any rights related to those policies.
         
      This article has been amended by Cabinet Resolution No. (24) of 2022. You are viewing the latest version. To view the previous version, click the version box below.
      Version 1(effective from 10/02/2019 to 01/04/2022)

       

      1. In addition to the CDD measures required for the Customer and the Beneficial Owner, Financial Institutions shall be required to conduct CDD measures and ongoing monitoring of the beneficiary of life insurance policies and funds generating transactions, including life insurance products relating to investments and family Takaful insurance, as soon as the beneficiary is identified or designated as follows:
         
        1. For the beneficiary identified by name, the name of the person, whether a natural person a legal person or a legal arrangement, shall be obtained.
           
        2. For a beneficiary designated by characteristics or by class– such as a family relation like parent or child, or by other means such as will or estate – it shall be required to obtain sufficient information concerning the beneficiary to ensure that the Financial Institution will be able to establish the identity of the beneficiary at the time of the pay-out.
           
      2. In all cases – the Financial Institutions should verify the identity of the beneficiary at the time of the payout as per the insurance policy or prior to exercising any rights related to the policy. If the Financial Institution identifies the beneficiary of the insurance policy to be a high-risk legal person or arrangement, then it should conduct enhanced CDD measures to identify the Beneficial Owner of that beneficiary, legal person, or legal arrangement.
         

       

    • Article (12)

      Financial Institutions and DNFBPs should apply CDD measures to Customers and the ongoing business relationship on the effective date of the present Decision, within such times as deemed appropriate based on relative importance and risk priority. It should also ensure the sufficiency of data acquired, in case CDD measures were applied before the effective date of the present Decision.

    • Article (13)

      1. Financial Institutions and DNFBPs shall be prohibited from establishing or maintaining a business relationship or executing any transaction should they be unable to undertake CDD measures towards the Customer and should consider reporting a suspicious transaction to the FIU.
         
      2. Even if they suspect the commission of a Crime, financial institutions and DNFBPs should not apply CDD measures if they have reasonable grounds to believe that undertaking such measures would tip-off the Customer and they should report a Suspicious Transaction to the FIU along with the reasons having prevented them from undertaking such measures.
         

      • Article (14)

        Financial Institutions and DNFBP’s shall commit to the following:

        1. Not to deal in any way with Shell Banks, whether to open bank accounts in their names, or to accept funds or deposits from them.
           
        2. Not to create or keep records of bank accounts using pseudonyms, fictitious names or numbered accounts without the account holder’s name.