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FSRA of Abu Dhabi Global Market (ADGM) has imposed a financial penalty of USD 486,000 (AED 1,784,835) on a licensed money service provider operating in ADGM for inadequate Anti-Money Laundering (AML) controls. The FSRA found that the provider failed to establish and maintain adequate AML systems and controls to ensure full compliance with its AML obligations.
This included failing to:
Conduct adequate customer due diligence (CDD) and enhanced due diligence (EDD) on customers, including failing to obtain and verify source of funds information for high-risk transactions.
Ensure its AML business risk assessment was up to date and adequately identified the assessed money laundering risks to which the business was exposed.
Ensure its AML policies, procedures, systems, and controls were adequate and effective to comply with AML requirements, including the effective monitoring and detection of suspicious activity or transactions.
The FSRA also highlighted that their AML failures put the ADGM financial system at risk of being used for money laundering and other financial crimes. The financial penalty imposed is significant, and it sends a strong message to other financial institutions in ADGM that they must take their AML obligations seriously.
The FSRA said that it expects the service provider to take all necessary steps to address the deficiencies identified in the FSRA’s investigation. The FSRA will continue to monitor its progress in this regard. The FSRA’s enforcement action against them reminds us of the importance of financial institutions having robust AML controls in place. AML controls help to protect the financial system from being used for money laundering and other financial crimes.
