3.2.2 Key Considerations for DPMS

Effective from 16/6/2021

All of the requirements above apply fully to DPMS customers. This section describes specific or additional considerations that LFIs should have in mind when carrying out CDD on such customers.

•	Nature of the Customer’s Business: Understanding the nature of the customer's business is particularly important in the context of DPMS, as risk is largely driven by the nature of the entity's business activities. LFIs should consider factors such as:
	o	Whether the customer qualifies as a DNFBP, and, if so, whether it is registered as such with the appropriate authority in its home jurisdiction (in the UAE, this is the Ministry of Economy, see section 2.2.4);
	o	The DPMS-specific risks of the countries where the customer does business (see section 3.1.1.2 (i)). Certain countries that may not be considered extremely high risk in other contexts may be very high risk in the DPMS sector, such as countries where illegal mining takes place on a significant scale, or countries were smuggling of gold and precious stones is particularly common;
	o	The products and services the customer provides, and their attractiveness to illicit actors.
	o	Example: Customer, a large Abu Dhabi luxury goods store, seeks to establish a general purpose business account with Bank B, an LFI. Customer sells fine jewelry to a clientele that includes a number of PEPs. Bank B collects additional information about sales and policies from Customer, and determines that all purchases of fine jewelry must be made using a credit card, and that fine jewelry accounts for less than 10% of Customer's annual turnover. Bank B decides that EDD is not necessary at this point, but decides to review activity on the account after six months to determine whether it presents any red flags.
•	Ongoing Monitoring: Because DPMS risk varies with their business activities, it is particularly important that LFIs monitor DPMS accounts for any unexpected changes in activity. A change in activity is not necessarily a sign of illicit behaviour, but it may indicate that a DPMS has changed its activity profile in ways that affect its risk rating.
	o	Example: When conducting its scheduled review of activity on the account of Customer, a large Abu Dhabi luxury goods store, Bank B notices that Customer has recently begun to receive large transfers from Iraq. When Bank B contacts Customer, the store explains that they've just begun conducting ‘trunk shows' of fashion and fine jewelry for customers in Iraq and as a result have substantially increased the business they do with customers there. Based on this information, Bank B increases Customer's risk rating and considers placing other controls on the relationship.