CDD, and where necessary EDD, are the core preventive measures that help LFIs manage the risks of all customers, particularly higher-risk customers. As discussed below, each stage of the CDD process gives LFIs an opportunity to collect the information they need to identify and manage the specific risks of higher- risk customers.

The goal of the CDD process is to ensure that LFIs understand who their customer is and the purpose for which the customer will use the LFI’s services. Where an LFI cannot satisfy itself that it understands a customer, then it should not accept that legal person or legal arrangement as a customer. If there is an existing business relationship, the LFI should not continue it. LFIs should also consider filing a Suspicious Transaction Report (STR), as discussed in section 3.3 below.

Under Article (5) of AML-CFT Decision, LFIs must conduct CDD before or during the establishment of the business relationship or account, or before executing a transaction for a Customer with whom there is no business relationship. Although Article 5 permits CDD to be delayed in circumstances of lower risk, the higher risk of the DPMS and real estate sectors makes it very unlikely that delayed CDD will be appropriate in the context of onboarding such customers.

LFIs should consult the UAE legal and regulatory framework currently in force for a full discussion of their CDD obligations and of the CBUAE's expectations for CDD procedures.