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16.13 Additional Provisions on CID, CDD and EDD

N 35/2018 STA
  1. 16.13.1The Licensed Person must apply the CID process in accordance with Paragraph 16.8 of this Chapter for a natural person who repeatedly exchanges foreign currency (example: once in a week) of value below AED 3,600 per transaction;
  2. 16.13.2The Licensed Person may accept a Seaman’s Pass/ID in order to complete the KYC Process, instead of acceptable IDs listed under Paragraph 16.8.3 of this Chapter, from natural persons who carry out the following transactions:
    1. a)Foreign currency exchange transactions of aggregate value up to AED 35,999.75 per week; and
    2. b)Money transfer transactions of aggregate value up to AED 27,000 per week.
  3. 16.13.3The Licensed Person, while accepting transactions under Paragraph 16.13.2 of this Chapter, must apply the CID process in accordance with Paragraph 16.8 of this Chapter for foreign currency exchange transactions and the CDD process in accordance with Paragraph 16.9 of this Chapter for money transfer transactions (except Paragraph 16.8.3 of this Chapter) at a minimum;
  4. 16.13.4The Licensed Person must apply the EDD process that is effective and proportionate to the ML/FT risks, including obtaining the approval of the Manager in Charge and the Compliance Officer, for establishing business relationships or one-off transactions with:
    1. a)FPEPs (Refer to Paragraph 16.20 of this Chapter);
    2. b)customers from high risk jurisdictions as identified by FATF and/or similar bodies;
    3. c)unusually complex transactions or those which have no clear economic or legal purpose;
    4. d)UAE Non-Resident customers; and
    5. e)transactions which the Licensed Person considers as high risk.
  5. 16.13.5The Licensed Person must conduct the EDD process for a customer, irrespective of the value of transaction, if it has reasonable ground to suspect that the customer is engaging in money laundering or terrorist financing. In case the suspicion continues to exist even after the EDD, the Licensed Person must immediately report such cases to the FID in accordance with Paragraph 16.21 of this Chapter;
  6. 16.13.6The Licensed Person must also conduct the EDD on its existing customers, if:
    1. a)there is a material change in the nature or ownership of a customer who is a juridical person;
    2. b)there is doubt about the reliability or adequacy of information previously obtained in relation to the customer; or
    3. c)there is any other reason that the Licensed Person deems it appropriate.
  7. 16.13.7If it is unable to verify the customer’s identity using reliable and independent sources of data or information, the Licensed Person must:
    1. a)immediately terminate any relationship with the customer; and
    2. b)consider whether it should make a suspicious transaction report to the FID.
  8. 16.13.8The Licensed Person must be able to demonstrate to the Central Bank Examiners that the KYC Process that has been applied is appropriate in view of its risks related to the money laundering, terrorist financing or related financial crimes;
  9. 16.13.9The Licensed Person must carry out the CDD process for every pre-paid card customer in addition to introducing appropriate velocity controls to monitor the activity of the customer based on the number of cards purchased (whether non-reloadable or reloadable) or number of times reloaded (where it is a reloadable card). These transactions must be closely monitored by the Compliance Officer. The systems must have the capability to support monitoring of such transactions and must generate necessary exception reports and alerts;
  10. 16.13.10The customer using automated machines (i.e. Kiosks) for executing transactions must have the Unique Identification Number (UIN) issued by the Licensed Person. In such cases, the Licensed Person must ensure that the customer is not given privileges to add new beneficiaries for conducting money transfers via such Kiosks directly. The Licensed Person must also set a maximum limit, which shall not exceed AED 3,600 per transaction for money transfers via such machines. In any case, the total value of money transfers by a customer via such machines shall not exceed AED 10,000 per month. All such transactions must be closely monitored by the Compliance Officer. The systems must have the capability to support monitoring of such transactions and must generate necessary exception reports and alerts;
  11. 16.13.11The Licensed Person must comply with the instructions and conditions that are stated in the Letter of No Objection issued by the Banking Supervision Department for special products or services;
  12. 16.13.12The Licensed Person must implement appropriate measures/controls to ensure that the Unique Identification Number issued to a customer is being used only by that customer at all times. The Licensed Person may consider the following to comply with this requirement:
    1. a)Verification of the original ID as per Paragraph 16.8.3 of this Chapter prior to accepting transactions from a customer; or
    2. b)Issue ID/Membership/Loyalty Cards that contain the basic customer details (such as name, date of birth, nationality, UIN etc.) including a recent photograph and such original cards must be verified prior to accepting transactions from customers; or
    3. c)Introduce appropriate biometric systems.
  13. 16.13.13 Natural persons, who do not have a valid visa to stay in the UAE, must not be permitted to carry out transactions unless they are in the grace period upon cancellation or expiry of the residence permit or on amnesty;
  14. 16.13.14The Licensed Person must understand the purpose and intended nature of the business relationship and obtain further information in higher risk situations;
  15. 16.13.15 The Licensed Person must have measures/controls in place for conducting on-going due diligence to determine whether transactions are consistent with the profile of the customer;
  16. 16.13.16 The Licensed Person must comply with wire transfer rules as specified in FATF Recommendation 16 for originating institution, beneficiary institution and intermediary institution, as applicable, notwithstanding the amount involved; and
  17. 16.13.17 The Licensed Person must apply the following KYC process for a customer who exchanges low denomination currency notes to larger ones:
    1. a)Customer Due Diligence (CDD) process, in accordance with Paragraph 16.9 of this Chapter, must be applied for a natural person when the value of such transaction is between AED 36,000 and AED 99,999.75;
    2. b)Enhanced Due Diligence (EDD) process, in accordance with Paragraph 16.10 of this Chapter, must be applied for a natural person when the value of such transaction is equal to or above AED 100,000;
    3. c)Enhanced Due Diligence (EDD) process, in accordance with Paragraph 16.11 of this Chapter, must be applied in case the customer is a legal entity irrespective of the value of such transaction; and
    4. d)If there are any reasonable grounds to suspect money laundering and/or terrorist financing, the Licensed Person must file a Suspicious Transaction Report (STR) with the FID, irrespective of the value of such transaction. Please refer to Paragraph 16.21.2 of this Chapter for more information on suspicious transaction reporting.