The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has levied a hefty fine of Dh1.85 million ($504,000) against Aarna Capital Limited (ACL) for multiple violations of anti-money laundering (AML) regulations. The violations occurred over a period stretching from June 8, 2017, to January 13, 2023.
An investigation by the FSRA revealed that ACL had failed to comply with several critical aspects of the ADGM’s anti-money laundering and sanctions rules and guidance rulebook. Notably, the firm was found lacking in maintaining adequate records of customer due diligence (CDD), assessing the CDD information frequently enough concerning the risk posed by the customers, and monitoring customer transactions for potential financial crime.
Specifically, the regulatory review highlighted ACL’s inadequate policies, procedures, systems, and controls designed to ensure compliance with the AML regulations. The firm also failed to assign appropriate AML risk ratings to some of its customers, a key requirement for tailored monitoring and management of potential risks.
Despite these shortcomings, the FSRA investigation did not uncover any instances of actual money laundering activities directly resulting from the failures in ACL’s AML systems and controls. However, the infractions were serious enough to warrant a substantial penalty to reinforce the importance of robust AML practices.
In response to the investigation, ACL and its senior management showed full cooperation with the FSRA’s inquiries and have since taken corrective actions to address and rectify the identified deficiencies. The firm agreed to settle the matter promptly, which qualified it for a 20% reduction in the potential maximum fine, which could have reached Dh2.31 million ($630,000).
Emmanuel Givanakis, CEO of the FSRA, emphasized the authority's commitment to enforcing stringent compliance with AML regulations. “The FSRA remains dedicated to advancing national efforts against money laundering and the financing of terrorism,” he stated. He further added that all regulated entities in ADGM are obligated to uphold effective anti-money laundering systems and controls to mitigate any associated financial crime risks with their operations and client transactions.
This enforcement action by the FSRA serves as a stern reminder to financial institutions within ADGM of the critical need to adhere strictly to AML regulations and the severe consequences of non-compliance.
