How should UAE law firms handle politically exposed persons (PEPs)?
The firm needs a system that finds the status before the engagement starts, not after. For a foreign politically exposed person the Executive Regulations require appropriate risk management systems to determine whether the client or the beneficial owner is a PEP, senior management approval before establishing the relationship or continuing it with an existing client, reasonable measures to identify the source of funds and wealth, and enhanced ongoing monitoring of the relationship.
For domestic PEPs and persons entrusted with a prominent function in an international organisation, the firm must take adequate measures to determine whether the client or beneficial owner falls within those categories, and must then apply the senior management approval, source of funds and wealth, and enhanced monitoring measures where the business relationship is high risk. The status extends to family members and close associates through the definition of beneficial owner and related persons, so the screening cannot stop at the named client. PEP status is not a reason to decline instructions. It is a reason to document the decision to accept them, at the right level of seniority.
Legal Reference (UAE):
· Cabinet Resolution No. 134 of 2025, Article 16(1)(a), which sets the measures for foreign politically exposed persons, including senior management approval, source of funds and wealth, and enhanced ongoing monitoring.
· Cabinet Resolution No. 134 of 2025, Article 16(1)(b), which applies adequate identification measures to domestic PEPs and international organisation officials, and the enhanced measures where the relationship is high risk.
· Cabinet Resolution No. 134 of 2025, Article 25, which requires the resulting records and decisions to be retained for not less than five years.
For your own circumstances, check your internal AML policy or speak to your compliance officer.