3.3.3 Customer Due Diligence for Legal Persons

Effective from 15/8/2021

When a legal person like a company uses an RHP to conduct a transaction, the RHP's customer is the company itself, not the individual representing the company. A legal person conducts a transaction when the funds involved belong to the legal person, and when the transaction is made as part of carrying out the legal person's business. If the customer is a legal person, it must be registered and based in the UAE to carry out transactions through a RHP. Legal persons such as companies, bodies corporate, foundations, partnerships, or associations, along with similar entities do not have bio-data like individuals and can transact under their own names while being controlled by other individuals. This means that they require specific CDD procedures. As per Articles 8 and 9 of the AML-CFT Decision RHP must perform the following actions for a legal person customer:

1.	Collecting and recording the following information about the legal person customer:
	a.	The legal person's name;
	b.	The legal person's legal form (e.g., limited liability company);
	c.	The address of the legal person's main office or headquarters;
	d.	The legal person's trade license; and
	e.	The name of the legal person's senior managing official.
2.	Conducting CDD as described in section 3.3.2 above on the individual representing the customer (the individual who is directly ordering the transaction).
3.	Determining that the representative is authorized to conduct the transaction via a valid authorization, such as the trade license and/or a letter from the legal person customer's management on its letterhead.
4.	Identifying and verifying the identity of the customer's beneficial owners.
	a.	Beneficial owners are the individuals who own and control the legal person. In many cases, the managing director or other similar top official will also be the beneficial owner, but not always.
	b.	RHP must identify every individual who owns 25% or more of the legal person customer. They must collect their names, and then perform CDD on them as required by section 3.3.2 above.
	c.	RHP can collect the names of beneficial owners, and thus determine who to perform CDD on, by asking the customer's representative. If they are concerned about the information provided by the representative, they should ask for documentation to prove ownership.
	d.	If no individual owns 25% of the legal person customer, RHP must identify, and conduct CDD on the individual who is the customer's senior managing official.
	e.	Beneficial owners cannot be other legal persons. If a legal person customer is owned by other legal persons, the RHP must understand their ownership as well until it identifies all individuals owning at least 25% of its customer.
5.	Understanding the customer's ownership and control structure. The RHP must understand who owns the customer, who exercises control over it and how.
6.	Understanding the nature of the customer business. The RHP must understand what sort of business the customer engages in and how the customer makes its money. If the customer's business doesn't make sense, or if the customer has no apparent business activities, that calls into question whether the funds involved in the transaction actually came from legitimate business activities.
•	Conducting sanctions screening on all related parties. The RHP must at least screen the following names against sanctions lists:
	a.	The name of the legal person customer;
	b.	The name of the customer's representative;
	c.	The name of the beneficial owner(s);
	d.	The name of the customer's senior managing official; and
	e.	The customer's address.

As with CDD for natural persons, RHP must take a clear, readable photo or photocopy of documents obtained from the customer during CDD, and must retain those documents for five years after the transaction.