Clubs, cooperative, charitable, social or professional societies

26. A Relevant Person should take steps to satisfy itself as to the legitimate purpose of clubs and societies by, for example, obtaining a certified copy of the constitution of the organisation.
27. The identity of the principal signatories and controllers should be verified in accordance with the requirements for private individuals. The capacity of the signatories to act on behalf of the club or society and the identity of Beneficial Owners of the funds should be established and verified.
28. A Relevant Person should consider the following items while completing the Customer identification requirements for a Client which is a charitable society:
a. whether the charity is licensed or permitted by a regulatory authority, regulator or government entity in its home country. (Note: charities in the U.A.E. are required to obtain from the U.A.E. Minister of Labour and Social Affairs a certificate which confirms their identity, permits them to open bank accounts and states whether they are permitted to collect donations and make financial transfers outside the U.A.E. through such bank accounts);
b. the type and quality of regulation to which the charity is subject in its home state;
c. the structure and overall character of management and trustees;
d. whether the charity allows donors to specify beneficiaries. If yes, then it would be prudent to ensure that such charities are closely regulated;
e. the pattern of beneficiaries: a small number of targeted beneficiaries could indicate potential risks;
f. whether the charity and its functioning is dominated by a few large donors and the pattern of donors; and
g. whether it is a private foundation as, if it is, it is more likely to be dominated by a single donor and linked to a small number of beneficiaries which will necessitate scrutiny of both the donor and the beneficiaries.
29. The Regulator may, from time to time:
a. review the relevant guidance in light of changing money laundering legislation issued by the U.A.E. Central Bank, money laundering trends and techniques and according to international standards, in order to keep the guidance current; and
b. provide such other guidance as it deems appropriate regarding Customer identification obligations.
30. The Regulator expects that a Relevant Person will take these changes into account by amending, as appropriate, its policies, procedures, systems and controls.
31. Sound "Know Your Customer" arrangements have particular relevance to the safety and soundness of a Relevant Person, in that:
a. they help to protect its reputation and the integrity of the ADGM by reducing the likelihood of Relevant Persons becoming a vehicle for, or a victim of, financial crime and suffering consequential reputational damage; and
b. they constitute an essential part of sound risk management, for example by providing the basis for identifying, limiting and controlling risk exposures to assets and liabilities, including assets under management.