UAE: Firm fined Dh1.3 million for violating anti-money laundering laws

The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has imposed a financial penalty of Dh1.3 million on Wise Nuqud Ltd (Wise), a licensed money service provider operating in the ADGM, for contravening a number of applicable Anti Money Laundering (AML) requirements.

The FSRA found that Wise did not establish and maintain adequate AML systems and controls to ensure full compliance with its AML obligations in that it did not:

- Identify and verify the source of funds (SOF) and the source of wealth (SOW), as part of the Enhanced Customer Due Diligence (EDD) it performed on a category of customers it had identified as high risk, before undertaking transactions on behalf of those customers. Wise had instead carried out SOF and SOW checks on those customers only when their account met a specified payment threshold (and after it had already established a business relationship with those customers);

-The firm didn’t properly obtain the approval of Senior Management to establish business relationships with a category of customers that it had identified as high risk;

- Wise didn’t consider customer nationality as part of its risk-based assessment of its customers.

- The financial institution did not obtain and consider adequate information on the intended nature of business for a category of its customers, in that Wise did not identify and assess the expected volume of business for those customers as part of the customer risk assessment and customer due diligence (CDD) it performed before establishing a business relationship with the customer.

The FSRA’s review did not identify any instances of actual money laundering resulting from Wise’s AML systems and control failures. Additionally, Wise and its senior management cooperated fully with the FSRA’s enquiries and have undertaken substantial steps to remediate each of the issues identified by the FSRA.

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ismail@khaleejtimes.com