When is enhanced due diligence required under UAE AML law?
Enhanced due diligence is required whenever a business relationship or transaction presents a higher risk of money laundering, terrorist financing or proliferation financing. The Executive Regulations require regulated entities to apply EDD to manage and mitigate identified higher risks, and they specify particular situations where it is mandatory, including dealings with politically exposed persons and with persons from high-risk countries.
EDD measures can include obtaining and verifying additional information on the customer and beneficial owner, understanding the purpose of the relationship, updating CDD information more frequently, taking reasonable measures to identify the source of funds and wealth, increasing ongoing monitoring, requiring the first payment through an account in the customer’s name at a comparable institution, and obtaining senior management approval to start or continue the relationship. The depth of EDD should be proportionate to the level of risk identified.
Legal Reference (UAE):
· Cabinet Resolution No. 134 of 2025, Article 5 - EDD measures for higher-risk relationships, including source of funds and wealth.
· Cabinet Resolution No. 134 of 2025, Article 23 - enhanced CDD for high-risk countries.
For more details, consult the full text of the Executive Regulations or seek guidance from your AML compliance officer.