6.4.2 EDD Measures for High-Risk Customers or Transactions

Effective from 13/7/2023

FIs are obliged to apply EDD measures to manage and mitigate the risks associated with identified High Risk Customers and/or transactions. The AML-CFT Decision defines a High Risk Customers as including those who represent a risk:

“…either in person, activity, Business Relationship, nature or geographical area, such as a customer from a high-risk country or non-resident in a country that does not hold an identity card, or a customer having a complex structure, performing complex operations or having unclear economic objective, or who conducts cash-intensive operations, or operations with an unknown third party...”

Examples of the EDD measures that should be taken by FIs are laid out in the relevant article of the AML-CFT Decision. When carrying out such measures (especially as regards obtaining and investigating more information about the nature of the customer’s business, purpose of the Business Relationship, or reason for the transaction), FIs should pay particular attention to the reasonableness of the information obtained, and should evaluate it for possible inconsistencies and for potentially unusual or suspicious circumstances. Examples of factors that FIs should take into consideration in this regard include, but are not limited to:

•	An illogical reason for a foreign customer’s or Beneficial Owner’s presence, or establishment of a Business Relationship, in the UAE;
•	Consistency between the nature of the customer’s business and transactions and the customer’s or Beneficial Owner’s professional background and employment history, in regard to which FIs may find it helpful to obtain background information from reliable and independent sources, as well as from internet and social media searches, and from the customer’s or Beneficial Owner’s CV;
•	The level of complexity and transparency of the customer’s transactions, especially in comparison with the customer’s or Beneficial Owner’s educational and professional background;
•	The level of complexity and transparency of the customer’s legal structure of legal persons or arrangements;
•	The nature of any other business interests of the customer or Beneficial Owner, including any other legal persons or arrangements owned or controlled;
•	Consistency between the customer’s line of business and that of the counterparty to the customer’s transactions (as identified, for example, through internet searches).

Additionally, and commensurate with the nature and size of their businesses, when carrying out EDD measures in respect of High Risk Customers or Beneficial Owners, FIs should take appropriate risk-mitigation measures such as, but not limited to:

•	Performing background checks (among other via internet searches, public databases, or subscription information aggregation services) to screen for possible matches with targeted and other international financial sanctions lists, indications of criminal activity (including financial crime), or other adverse information;
•	Using more rigorous methods for the verification of the customer’s or Beneficial Owner’s identity in regard to High Risk Customers (see Section 6.3.1, Customer and Beneficial Owner Identification/Verification for more information).