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Abu Dhabi authority fines Aarna Capital Dh1.85 million for violating anti-money laundering laws

Investigation found that ACL had contravened several requirements in anti-money laundering and sanctions rules and guidance rulebook

Aarna Capital Limited (ACL) has been fined $504,000 (Dh1,850,940) by the Financial Services Regulatory Authority (FSRA) of ADGM for failing to maintain adequate anti-money laundering (AML) systems and controls between June 8, 2017, and January 13, 2023.

An FSRA investigation found that ACL had contravened a number of specific requirements in the FSRA’s anti-money laundering and sanctions rules and guidance rulebook.

In particular, the FSRA found, based on a detailed review of a sample of ACL’s customer relationships, that ACL failed to ensure that its policies, procedures, systems and controls were adequate to ensure compliance with certain requirements in the AML Rules. It also failed to adequately undertake AML risk assessments of, and assign proportionate AML risk ratings to, a number of its customers.

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ADGM found that Aarna failed to maintain adequate records of the customer due diligence it had performed in relation to a number of its customers; ensure that the CDD information it held for a number of its customers was assessed with a frequency appropriate to the risk of the customer; ensure that it appropriately monitored all customer deposit and withdrawal transactions to ensure they were consistent with its knowledge of the customer; and maintain adequate systems and controls to monitor and detect suspicious activity or transactions for potential financial crime other than market abuse.

The FSRA’s investigation did not identify any instances of actual money laundering resulting from ACL’s AML systems and control failures.

ACL and its senior management cooperated fully with the FSRA’s enquiries and ACL has undertaken steps to remediate each of the issues identified by the FSRA.

ACL agreed not to dispute the FSRA’s findings and agreed to settle at the earliest opportunity, which meant that it qualified for a discount of 20 per cent on the financial penalty. Otherwise, the FSRA would have imposed a financial penalty of $630,000 (Dh2,313,675).

Emmanuel Givanakis, chief executive officer of the FSRA, said: “The FSRA remains committed to advancing the national efforts against money laundering and the financing of terrorism. All regulated financial services firms in the ADGM are required to maintain effective anti-money laundering systems and controls in order to mitigate financial crime risks associated with their business activities and customers. The FSRA will continue to enforce strict compliance with its anti-money laundering regulations and rules.”

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