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Understanding ‘Know Your Customer’ or KYC and its Role in Compliance in the UAE

January 26, 2023

KYC stands for “Know Your Customer” and it is a process used by financial institutions, jurisdictions and regulated companies to verify the identity of their clients. This process helps to ensure that the individual or organisation is in compliance with the UAE’s Federal Anti-Money Laundering (AML) laws and regulations.

KYC is important because it helps to prevent financial crime and protect against fraud. By verifying the identity of clients, institutions can ensure that they are not doing business with individuals or entities that may be involved in illegal activities.

The steps for the KYC process followed by CBD Corporate Services include:

  • Customer identification: This step involves collecting and verifying the personal information of the customer or client, such as their name, address, date of birth, and government-issued identification. This step is used to confirm the individual’s identity and make sure that the information provided is accurate.
  • Customer Due Diligence (CDD): This step involves conducting background checks on the customer or client to verify their identity and assess any potential risks associated with doing business with them. This can include researching their financial history, business relationships, and any previous illicit activity.
  • Risk assessment: After conducting background checks, CBD evaluates any potential risks associated with the customer surrounding money laundering.
  • Ongoing monitoring: The KYC process is not a one-time event, the AML team at CBD continuously updates and monitors details to ensure that the customer’s information remains accurate and up to date.

Penalties for Being Non-Compliant

The consequences of not completing KYC can vary depending on the institution and the jurisdiction in which it operates. In some cases, it may result in the closure of the account or the termination of the business relationship. In other cases, it may result in fines or penalties for the institution or the customer.

How CBD Can Assist

As a corporate service provider, we understand the importance of staying compliant with KYC regulations and have the expertise to assist you with navigating the process. We provide a comprehensive and efficient KYC process to help you meet various compliance requirements and protect your business from financial crime. Contact us today to learn more about our services and to schedule a consultation with our AML team. Contact us on enquiries@cbdcorporateservices.com or call +971 4551 0677 or Whatsapp +971 56 218 4695.

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