When can a UAE DNFBP apply Simplified Due Diligence?
A UAE Designated Non-Financial Business or Profession (DNFBP) may apply Simplified Due Diligence (SDD) only where it has assessed and documented that the money-laundering and terrorist-financing risk of a customer, product or relationship is genuinely low. SDD is a reduction in the intensity of standard customer due diligence, not an exemption from it, and it must be justified by evidence rather than convenience.
Where the low-risk finding is supported, the measures a DNFBP may simplify include verifying the identity of the customer and beneficial owner after the business relationship is established, reducing the frequency of ongoing monitoring and transaction scrutiny, and adjusting the extent of information collected. The simplification must remain proportionate to the specific low-risk factors identified, and must take account of the national risk assessment. SDD cannot be used where higher-risk indicators are present, where the customer or beneficial owner is a politically exposed person, or where sanctions or high-risk country factors apply.
If circumstances change or suspicion arises, the DNFBP must revert to full or enhanced due diligence. The risk rationale for applying SDD should be recorded and available to the supervisory authority.
Legal Reference (UAE):
· Cabinet Resolution No. 134 of 2025, Article 5 — conditions for applying simplified due diligence proportionate to low risk.
· Federal Decree-Law No. 10 of 2025, Article 19(1)(a) — risk-based approach to determining the scope of due diligence.
For more details, consult the full text of Cabinet Resolution No. 134 of 2025 or seek guidance from your AML compliance officer.