AGDM regulator fines five financial institutions for breaching reporting requirements

The penalties and administrative fees range from $8,169 to $32,403

Abu Dhabi Global Market (ADGM) has strict financial and tax reporting requirements. Photo: Aldar

Five financial institutions have been fined by Abu Dhabi Global Market's Financial Services Regulatory Authority for breaching reporting requirements.

The FSRA has imposed penalties and administrative fees ranging from Dh30,000 to Dh119,000 ($8,169 to $32,403) on the institutions for contraventions of the Common Reporting Standard regulations, it said in a statement on Thursday.

The regulations concern financial and tax-related information exchange on a global level between tax authorities and other international financial regulators through secure channels.

It sets out the scope of information to be reported, the financial institutions that are required to report, the account holders subject to reporting, as well as the procedures to be followed by financial institutions.

The actions imposed by the FSRA address failures related to applying adequate due diligence procedures; keeping records of the performance of due diligence; reporting required information in a complete and accurate manner; and obtaining valid self-certification of tax information from clients, the statement said.

“The ADGM is committed to ensuring its regulations are complied with, including those related to tax reporting, which are based on international obligations and standards," said Emmanuel Givanakis, chief executive of the FSRA.

"A key objective of the FSRA is to promote and enhance the integrity of the ADGM financial system. Accordingly, the FSRA supports initiatives to make tax systems more transparent and to prevent practices intended to circumvent tax reporting."

The FSRA has also been cracking down on companies that fail to comply with its anti-money laundering requirements.

The regulator this week imposed a penalty of $360,000 on Wise Nuqud, a licensed money service company, for failing to abide by several anti-money laundering requirements.

The FSRA found that Wise Nuqud, which operates within the ADGM, did not establish and maintain adequate anti-money laundering systems and controls to ensure full compliance with its obligations.

The authority has “robust and comprehensive” supervision and enforcement policies in place to thwart money laundering and the financing of terrorism, it said.

The penalties for breaching the CRS regulations were imposed by the FSRA in June and July, according to ADGM's website. The companies fined include Ava Trade Middle East, ADS Investment Solutions, Digital Spring Ventures and Sarwa Digital Wealth.

The CRS, developed by the Organisation for Economic Co-operation and Development, took effect in the UAE in January 2017.