Anti-money laundering (AML) is a set of legal compliance requirements that are implemented with the objective of combating the crimes of money laundering, terrorism financing and proliferation financing. Know Your Customer (KYC) is one such compliance requirement. It involves identifying and verifying the identity of a customer through valid, government-issued identification documents. KYC process needs to be conducted by entities regulated under the AML laws of a country.
For a greater understanding, watch our webinar on KYC requirements as a part of AML compliance in the UAE here:
AML is the wider framework for preventing money laundering, terrorist financing and proliferation financing. KYC, expressed in UAE law as customer due diligence, is one part of that framework: the process of identifying and verifying a customer or beneficial owner, identifying the nature of their business, the purpose of the relationship, and the ownership and control structure, including ongoing monitoring.
The law places customer due diligence alongside several other obligations that together make up an AML programme: identifying and assessing the risks of the crime and keeping that assessment updated; refusing anonymous, fictitious, alias or numbered accounts; maintaining internal policies and controls approved by senior management; implementing targeted financial sanctions instructions without delay; and retaining records. Doing KYC well therefore satisfies one obligation, not the whole regime.
Legal Reference (UAE):
· Federal Decree-Law No. 10 of 2025, Article 1: the definition of Customer Due Diligence; Article 19(1): the full set of preventive obligations of which CDD is one.
· Cabinet Resolution No. 134 of 2025, Articles 6 to 10: identity verification, when CDD applies, its content, and beneficial owner identification.
For more details, refer to the Executive Regulations or seek guidance from your AML compliance officer.