AML 6 Guidance

1. This chapter prescribes the risk-based assessment that must be undertaken by a Relevant Person on a customer and the proposed business relationship, transaction or product. The outcome of this process is to produce a risk rating for a customer, which determines the level of Customer Due Diligence (CDD) which will apply to that customer under chapter 7. That chapter prescribes the requirements of CDD and of Enhanced CDDfor high risk customers and Simplified CDD for low risk customers.
2. CDDin the context of AML refers to the process of identifying a customer, verifying such identification and monitoring the customer's business and money laundering risk on an ongoing basis. CDD is required to be undertaken following a risk-based assessment of the customer and the proposed business relationship, transaction or product.
3. Relevant Persons should note that the ongoing CDD requirements in Rule 7.6.1 require a Relevant Person to ensure that it reviews a customer's risk rating to ensure that it remains appropriate in light of the AML risks.
4. The DFSA is aware that in practice there will often be some degree of overlap between the customer risk assessment and CDD. For example, a Relevant Person may undertake some aspects of CDD, such as identifying a Beneficial Owner, when it performs a risk assessment of the customer. Conversely, a Relevant Person may also obtain relevant information as part of CDD which has an impact on its customer risk assessment. An example of such relevant information is information on the ownership and control structure of the customer. Where information obtained as part of CDD of a customer affects the risk rating of a customer, the change in risk rating should be reflected in the degree of CDD undertaken.
Derived from RM117/2013 [VER9/07-13]
[Amended] DFSA RM231/2018 (Made 6th June 2018) [VER15/07-18]