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3.2.1.3.1 Nature of the Customer’s Business

Effective from 16/6/2021

Understanding the nature of the customer's business involves first i) identifying that the customer is a participant in a higher-risk sector; and ii) collecting all the information necessary to assess the risk factors for that specific customer type, as described in section 3.1 above. Customers may not identify themselves explicitly as DPMS or real estate sector participants. In some cases, the nature of the customer's business will be clear based on the customer's own statements; in others, the LFI may need to ask additional questions to ascertain whether or not the customer carries out any of the qualifying activities. For example, an importer/exporter may qualify as a DPMS if it trades in precious metals and stones among other products, or a department store may qualify if it sells fine jewelry.

Following the determination of the customer's sector, the LFI should collect the information necessary to understand the products and services the customer offers, where it operates, and who its customers are. The exact information collected will depend on both the nature of initial findings and on the risk level of the entity. For example:

 Company A is a large commercial real estate broker licensed in Sharjah and supervised as a DNFBP by the Ministry of Economy. Company A applies for a general purpose business account with Bank C, an LFI. Bank C interviews Company A regarding its business activities and customer base, and asks Company A to supply a copy of its institutional risk assessment and its CDD and STR policies.
 
 Company B, a small business based in Dubai, seeks to establish a checking account with Bank C, an LFI. Company B represents that it primarily sells furniture and curios, but in response to questions from Bank C during the CDD process discloses that it sells gold and silver coins and also that it accepts cash payments. Company B is not licensed as a DPMS and is not registered by the Ministry of Economy. Bank C decides to make an unannounced site visit to Company Band discovers that gold objects make a up a large part of its inventory. Bank C declines to consider opening the account until Company B is licensed and registered as a DPMS.