| 16.11.1 | The CDD and the EDD processes, in accordance with Paragraphs 16.11.2 to 16.11.12 of this Chapter, must be applied for a customer at the time of onboarding (i.e. prior to entering into any business relationship), if it is a legal person, such as a company, or a legal arrangement, such as a trust. CDD must include verification of the identity of the legal person or arrangement (i.e. its licenses, incorporation documents, etc.) and identification of its Beneficial Owners (BOs). The Licensed Person, having completed CDD, must then perform EDD as discussed in this section.
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| 16.11.2 | The following process must be followed at a minimum while onboarding a legal person or arrangement as a customer. The Licensed Person must verify appropriate documents and retain copies to confirm information under Paragraph 16.11.4 of this Chapter.
| a) | Required CDD: Unless otherwise provided, all documents must be certified as “Original Sighted and Verified” by the employee of the Licensed Person who carries out the KYC process after the verification of originals. | 1. | An appropriate KYC Questionnaire of the Licensed Person must be completed and signed by the legal person or legal arrangement; | | 2. | Ownership structure of the legal person or legal arrangement must be collected including the purpose and nature of the intended business relationship; | | 3. | Record the legal person or legal arrangement’s legal form (e.g., limited liability corporation, limited liability partnership, trust, waqf, etc.) and collect a copy of the legal person or legal arrangement’s proof of existence (such as, for legal persons, its proof of incorporation or partnership agreement; for legal arrangements, the trust or waqf deed, or an equivalent document); | | 4. | Collect copies of the powers that regulate and bind the legal person or legal arrangement (e.g., the customer’s founding documents, such as the memorandum of association, the articles of incorporation, or other similar documents for legal persons; the trust or waqf deed for legal arrangements); | | 5. | Verify names of relevant persons holding senior management positions in the legal person or legal arrangement; | | 6. | Collect copies of valid permissions/licenses of the legal person or legal arrangement from competent authorities to carry out the business (examples: certificate of incorporation, trading license or equivalent, license issued by the Central Bank or other competent authorities where applicable, etc.). The Licensed Person must ensure that copies of valid licenses are available in the records at all times. | | 7. | Original IDs of BOs must be verified (in accordance with Paragraphs 16.8.3, 16.9.6 and 16.9.7 of this Chapter) and copies retained. Where the BO resides outside the UAE, original copies of IDs must be appropriately notarized or attested by relevant authorities in the respective foreign country and in the UAE; | | 8. | Where no individual meets the definition of BO, the Licensed Person must verify the original IDs (in accordance with Paragraphs 16.8.3, 16.9.6 and 16.9.7 of this Chapter) for the natural person exercising control of the legal person or legal arrangement customer through other means, such as by virtue of their position as CEO or Managing Director; | | 9. | Collect the list of authorized signatories and verify their original IDs and retain the copies; | | 10. | Authorization letter must be taken for representatives of the legal person or legal arrangement who carry out transactions on its behalf; | | 11. | Verify original IDs of representatives, who have authorization to carry out transactions, (in accordance with Paragraphs 16.8.3, 16.9.6 and 16.9.7 of this Chapter). Such representatives must be UAE residents. The relationship of such representative with the legal person or legal arrangement must be established; | | 12. | Assess and record the expected annual activity (annual value and number of transactions for future ongoing and transaction monitoring); | | 13. | Apply sanction checks (as required by Paragraph 16.25 of this chapter) and conduct internet searches on the name of the legal person or legal arrangement, BO, group companies, subsidiaries and the names of representatives of the legal person or legal arrangement who are authorized to carry out transactions on its behalf; | | 14. | Apply PEP checks on BOs, as required by Paragraph 16.13.3 of this Chapter. Where the BO is a PEP, the Licensed Person must follow the procedures in Paragraph 16.13 of this Chapter.
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| | b) | The Licensed Person must in addition carry out the following required EDD steps: | 1. | The Licensed Person must carry out a ML/FT risk assessment on business activities of the legal person or legal arrangement including by visiting its business location (where relevant) and carrying out a risk assessment of its customers; and Both the Manager in Charge and the Compliance Officer must approve the business relationship with legal persons or arrangements. | | 2. | Where a Beneficial Owner is a PEP, the business relationship with such legal person or legal arrangement must be established only after obtaining approval of the Board of Directors (or of the Owner/Partners where there is no Board of Directors).
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| 16.11.3 | The following information about the customer, which is a legal person or legal arrangement, must be recorded in the Point of Sale system, at a minimum, to create the customer profile and the UIN after completing the EDD process under Paragraphs 16.11.1 and 16.11.2 of this Chapter:
| a) | Full legal name of the legal person or legal arrangement; | | b) | Residential status (whether incorporated/operating within the UAE or outside the UAE); | | c) | Address (P.O Box, Shop No., Building name, Street, City, Emirate, Country); | | d) | Phone numbers; | | e) | Fax number; | | f) | Email; | | g) | Date of establishment; | | h) | ID type (whether trade license or the equivalent); | | i) | Trade license (or the equivalent) number; | | j) | Trade license (or the equivalent) place of issue; | | k) | Trade license (or the equivalent) issue date; | | l) | Trade license (or the equivalent) expiry date; | | m) | Type of business of the legal person or legal arrangement; | | n) | Names and ID details, such as ID types and ID numbers, of BOs of the legal person or legal arrangement; | | o) | Names and ID details, such as ID types and ID numbers, of persons authorized to carry out transaction on behalf of the legal person or legal arrangement; and | | p) | Expected annual activity (i.e. expected annual value and number of transactions for future transaction monitoring).
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| 16.11.4 | The Licensed Person must collect appropriate documents to verify and confirm the source of funds, purpose of transaction and the commercial/economic reason for each transaction by a legal person or legal arrangement;
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| 16.11.5 | The following customer information must be printed on the transaction receipt, at a minimum:
| a) | UIN assigned to the legal person or legal arrangement; | | b) | Full legal name of the legal person or legal arrangement; | | c) | Address (P.O Box, Shop No., Building name, Street, City, Emirate, Country); | | d) | Phone number; | | e) | Name and ID number of the person representing the legal person or legal arrangement to carry out transactions on its behalf; | | f) | Country of incorporation; | | g) | ID type (whether trade license or the equivalent); | | h) | Trade license (or the equivalent) number; | | i) | Trade license (or the equivalent) place of issue; | | j) | Trade license (or the equivalent) issue date; | | k) | Trade license (or the equivalent) expiry date; | | l) | Method of payment (whether cash or cheque, etc.); | | m) | Source of funds; | | n) | Purpose of transaction; and | | o) | Beneficiary name and bank account details (wherever applicable).
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| 16.11.6 | The receipt must be signed by the representative of the legal person or legal arrangement who carries out the transaction on its behalf and must be retained in the records along with all KYC supporting documents in accordance with Paragraph 16.29 of this Chapter;
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| 16.11.7 | The customer profile must be reviewed and updated either annually or upon the expiry of the trade license or the IDs of any person authorized to make transactions on behalf of the customer, whichever comes first. At this time, the Licensed Person must conduct ongoing monitoring on the customer which must consist of the following:
| a) | The original ID (in accordance with Paragraphs 16.8.3, 16.9.6 and 16.9.7 of this Chapter) and its certified copy must be held in the records during the review of a customer profile; | | b) | CDD and EDD must be repeated and the customer profile, including the supporting evidence as per Paragraph 16.11.2 of this Chapter, must be updated annually at a minimum. The Licensed Person must ensure that copies of valid licenses are available in the records at all times. | | c) | CDD and EDD must also be repeated whenever there is a change in the profile of the customer, such as any change in the ownership of a legal person or legal arrangement; | | d) | The Licensed Person must scrutinize the transactions concluded by a customer to ensure that transactions are consistent with the Licensed Person’s knowledge of the customer, the customer’s business, risk profile, the source of funds and where necessary, source of the customer’s wealth; and | | e) | The Licensed Person must review transaction monitoring results for the customer to determine whether any STRs or SARs have been filed or whether the customer’s behavior has generated alerts.
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| 16.11.8 | CDD and EDD in accordance with Paragraph 16.11.2 of this Chapter must also be undertaken before entering into below types of business relationships:
| a) | Foreign correspondent banking arrangements, such as those with banks, exchange houses or any other financial institutions, for the purpose of money transfer services; | | b) | Money transfer arrangements with instant money transfer service providers; | | c) | Hedging arrangements with local or foreign institutions; | | d) | Arrangements to import or export banknotes from/to foreign institutions, such as Banks, exchange houses or other financial institutions outside the UAE; and | | e) | Arrangements with local or foreign entities to offer special products/services.
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| 16.11.9 | All business relationships under Paragraph 16.11.8 of this Chapter must be approved by the Compliance Committee of the Licensed Person and by the Banking Supervision Department of the CBUAE prior to establishment of the business relationship.;
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| 16.11.10 | For all business relationships under Paragraph 16.11.8.a) of this Chapter, LEH must collect sufficient information about any receiving correspondent institution for the purpose of identifying and achieving a full understanding of the nature of its business, and to determine, through publicly available information, its reputation and level of AML/CFT controls, including whether it has been subject to a ML/FT investigation or regulatory action. LEH must also evaluate the AML/CFT controls applied by the receiving correspondent institution and understand the responsibilities of each institution in the field of AML/CFT.
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| 16.11.11 | While undertaking EDD as per Paragraph 16.11.8 of this Chapter on entities located outside the UAE, the Licensed Person may:
| a) | visit the business locations of entities which are located in countries assessed as High Risk in order to carry out risk assessment as per Paragraph 16.11.2 (b).1 of this Chapter where it is practical and otherwise safe to do so (i.e. no site visit is required when such entities are located in low or medium risk countries); | | b) | Identify the BOs and collect copies of the IDs of BOs on a risk sensitive basis by the Compliance Officer of such foreign entities (in accordance with Paragraphs 16.8.3, 16.9.6 and 16.9.7 of the Standards), in case the verification of original documents by the Licensed Person is practically impossible. Where the BO resides outside the UAE, original copies of IDs must be appropriately notarized or attested by relevant authorities in the respective foreign country and in the UAE;
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| 16.11.12 | The Licensed Person must not enter into any business relationship with a Shell bank or company .
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