3.2.1.3.2 Nature and Purpose of the Business Relationship

Effective from 16/6/2021

The risk to which the LFI may be exposed can vary based on the purpose of the account and the types of financial products and services the customer wishes to use. Nevertheless, if other risk factors are present a customer may still qualify as high risk even if they use only low-risk products and services.

	•	Certain aspects of a customer's business may be higher risk than others. For example, an account used for payroll may be lower risk than an account used to pay suppliers or that receives payments directly from customers.
	•	Certain LFI products and services may expose the LFI to higher risk. These include cash management services or large-scale cash deposits, and international wires, especially wires to or from high-risk or secrecy jurisdictions. These services are higher risk because they facilitate rapid movements of value across borders, or (in the case of cash) because they are conducive to anonymity. The LFI's entity risk assessment should identify its higher-risk products and services, and a customer that intends to use such services should be risk-rated accordingly.

For example:

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Company X is a small DPMS operating in the Dubai Gold Souk that applies for a general purpose checking account with Bank C, an LFI. Company X tells Bank C that it sells gold jewelry. It claims that it does not accept cash and has not registered as a DNFBP, but tells Bank C to expect weekly cash deposits. The relationship manager visits the store and observes a sign by the cash register saying “Payment by Cheque or Credit Only.” Bank C decides to prohibit cash deposits into the account with prior authorization, and to restrict such deposits to a low monthly total.