2.2. Features and Controls that Mitigate the Risk of a Legal Person or Arrangement

Effective from 7/6/2021

At a high level, features and controls that affect the vulnerabilities of legal persons and arrangements can be divided into four categories:

	•	The formation process and requirements to establish the legal person or arrangement;
	•	The identification of the individuals actually owning and controlling legal persons and arrangements;
	•	The reporting and recordkeeping requirements imposed on companies throughout their lifetime; and
	•	The formation authority’s supervisory regime and enforcement tools.

The subsections that follow briefly discuss the various measures that—if effectively implemented—can help mitigate the vulnerabilities of legal persons and arrangements.

LFIs should be aware of the risks associated with all customer types, including legal persons and arrangements established outside the UAE. Appropriately assessing these risks will often involve developing an understanding of the controls in place to ensure transparency.

CBUAE recognizes that LFIs do not control the legal frameworks governing their customers. Nevertheless, CBUAE recommends that LFIs familiarize themselves with the features of the company forms most commonly found within their customer base, and the controls in place in the jurisdictions where their legal person customers are most commonly registered. LFIs should also consider seeking some or all of the following information in order to understand legal person and legal arrangement risks, particularly when conducting enhanced due diligence on legal person and legal arrangement customers that pose higher risks.