What is enhanced due diligence for high-risk clients at a UAE law firm?
Enhanced due diligence (EDD) is the set of additional measures a law firm must apply when a client, transaction, or country presents a higher money laundering or terrorist financing risk. It goes beyond standard customer due diligence and must be proportionate to the level of risk identified.
Typical EDD measures include obtaining and verifying additional information on the client, the beneficial owner, and the purpose of the matter, establishing the source of funds and source of wealth, obtaining senior management approval before starting or continuing the relationship, and applying closer, more frequent ongoing monitoring. EDD is mandatory for dealings connected to high-risk countries identified by the National Committee and for higher-risk clients such as politically exposed persons. A firm should trigger EDD from its own risk assessment and document what additional steps it took and why.
Legal Reference (UAE):
· Cabinet Resolution No. 134 of 2025 (Executive Regulations), Article 23 — requires enhanced due diligence proportionate to risk, including high-risk countries.
· Cabinet Resolution No. 134 of 2025 (Executive Regulations), Article 16 — additional measures for politically exposed persons.
For more details, consult the full text of Cabinet Resolution No. 134 of 2025 or seek guidance from your AML compliance officer.