UAE: Dh1.7 million for violating anti-money laundering laws

According to the FSRA, Pyypl did not meet the AML compliance requirement and went beyond the scope of its Financial Services Permission. This means that Pyypl’s measures to combat financial crime and money laundering risks were found to be inadequate.

Emmanuel Givanakis, the CEO of FSRA, emphasized that the regulatory authority is dedicated to ensuring that all regulated entities uphold high standards in preventing financial crime and money laundering risks. Additionally, it is crucial for these entities to comply with the FSRA’s Rules and Regulations. If necessary, the FSRA is prepared to take firm action to ensure that firms fully adhere to AML requirements within the ADGM. The FSRA also aims to prevent authorized firms from engaging in activities that are outside the scope of their license.

The UAE regulators have toughened rules and regulations surrounding AML and have penalised banks and exchange houses for violating the laws. The UAE Central Bank has also penalised financial institutions for not adhering to AML and combating the financing of terrorism.

The Financial Services Regulatory Authority (FSRA) of ADGM found that Pyypl failed to establish and maintain adequate AML systems and controls with its AML obligations. It also failed to ensure that its AML business risk assessment was up to date and adequately carrying out required AML risk assessments and due diligence on its customers, in that it failed to assess the expected payment volumes of its customers, assess and consider all of its products when undertaking customer AML risk-assessments, and obtain and verify its customers’ residential addresses when undertaking customer due diligence.

The money service provider also failed to ensure that 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 ADGM investigation also found that between May 2021 and November 2022, Pyypl made arrangements for its customers to buy contracts of insurance from a third-party provider through an application provided by Pyypl. In doing so, Pyypl was found to have conducted the Regulated Activity of Insurance Intermediation without the appropriate authorisation to perform this activity.

A statement issued by ADGM said Pyypl agreed not to dispute the findings, 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 $607,500 (Dh2.231 million).