When must a UAE law firm apply enhanced due diligence?
A law firm must apply enhanced due diligence whenever a client or matter presents a higher risk of money laundering or terrorist financing. Classic triggers include politically exposed persons and their close associates, clients or funds connected to high-risk jurisdictions, unusually complex or opaque ownership structures, and transactions that lack an obvious economic or lawful purpose.
Enhanced measures go beyond standard checks. They include taking reasonable steps to establish the source of funds and source of wealth, obtaining senior management approval to start or continue the relationship, and applying closer and more frequent ongoing monitoring. For property deals or company structures routed through several jurisdictions, the firm should map the ownership chain and satisfy itself about who ultimately controls the client. If the enhanced checks cannot dispel the concern, the firm should decline the work and consider filing a suspicious transaction report.
Legal Reference (UAE):
· Cabinet Resolution 134/2025, Article 16 — enhanced measures for politically exposed persons, including source of funds and wealth.
· Cabinet Resolution 134/2025, Article 23 — enhanced due diligence and countermeasures for high-risk countries.
For more details, consult the full text of Cabinet Resolution 134/2025 or seek guidance from your AML compliance officer.