Entire Section

  • AML 7.7 AML 7.7 Failure to conduct or complete customer due diligence

    • AML 7.7.1 AML 7.7.1

      (1) Where, in relation to any customer, a Relevant Person is unable to conduct or complete the requisite Customer Due Diligence in accordance with AML Rule 7.1.1 it must, to the extent relevant:
      (a) not carry out a transaction with or for the customer through a bank account or in cash;
      (b) not open an account or otherwise provide a service;
      (c) not otherwise establish a business relationship or carry out a transaction;
      (d) terminate or suspend any existing business relationship with the customer;
      (e) return any monies or assets received from the customer; and
      (f) consider whether the inability to conduct or complete Customer Due Diligence necessitates the making of a Suspicious Activity Report under AML Rule 13.3.1(c).
      (2) A Relevant Person is not obliged to comply with (1) (a) to (e) if:
      (a) to do so would amount to "tipping off" the customer, in breach of Federal AML legislation; or
      (b) the FIU directs the Relevant Person to act otherwise.
      Derived from RM117/2013 [VER9/07-13]
      [Amended] DFSA RM196/2016 (Made 7th December 2016). [VER13/02-17]
      [Amended] DFSA RM223/2018 (Made 18th April 2018). [VER14/07-18]]
      [Amended] DFSA RM258/2019 (Made 26th June 2019). [VER16/07-19]

      • AML 7.7.1 Guidance

        1. In complying with Rule 7.7.1(1) a Relevant Person should apply one or more of the measures in (a) to (f) as appropriate in the circumstances. Where CDD cannot be completed, it may be appropriate not to carry out a transaction pending completion of CDD. Where CDD cannot be conducted, including where a material part of the CDD, such as identifying and verifying a Beneficial Owner cannot be conducted, a Relevant Person should not establish a business relationship with the customer.
        2. A Relevant Person should note that Rule 7.7.1 applies to both existing and prospective customers. For new customers it may be appropriate for a Relevant Person to terminate the business relationship before a product or service is provided. However, for existing customers, while termination of the business relationship should not be ruled out, suspension may be more appropriate depending on the circumstances. Whichever route is taken, the Relevant Person should be careful not to tip off the customer.
        3. A Relevant Person should adopt the RBA for CDD of existing customers. For example, if a Relevant Person considers that any of its existing customers (which may include customers which it migrates into the DIFC) have not been subject to CDD at an equivalent standard to that required by this module, it should adopt the RBA and take remedial action in a manner proportionate to the risks and within a reasonable period of time whilst complying with Rule 7.7.1.
        Derived from RM117/2013 [VER9/07-13]
        [Amended] DFSA RM231/2018 (Made 6th June 2018) [VER15/07-18]