If a law firm is unable to complete customer due diligence, it must not open the account, establish the business relationship or carry out the transaction, and where a relationship already exists it should consider terminating it. Incomplete due diligence means the firm cannot properly understand who it is dealing with, which is exactly the situation the rules are designed to prevent.
Where the inability to verify identity or beneficial ownership arises alongside grounds for suspicion, the firm must also consider filing a suspicious transaction report to the Financial Intelligence Unit. The firm should avoid tipping off the client while it assesses the position, and route the decision through the compliance officer. There is a limited ability to defer completing verification in defined low-risk situations, but that is an exception rather than the norm and must be managed carefully. Walking away from a client who will not provide required information is a legitimate and often necessary compliance outcome.
Legal Reference (UAE):
- Cabinet Resolution No. 134 of 2025, Article 14 - action required where CDD cannot be completed, including ongoing monitoring and cessation.
- Federal Decree-Law No. 10 of 2025, Article 18 - duty to report suspicious transactions where suspicion arises.
For more details, consult the full text of Cabinet Resolution No. 134 of 2025 or seek guidance from your AML compliance officer.