Aarna Capital Limited (ACL) has been fined $504,000 (Dh1,850,940) by the Financial Services Regulatory Authority (FSRA) of ADGM for not maintaining proper anti-money laundering (AML) systems and controls from June 8, 2017, to January 13, 2023.
An investigation by the FSRA revealed that ACL did not meet several specific requirements outlined in the FSRA’s AML rules and guidelines.
FSRA Findings on ACL’s Compliance Failures
The FSRA’s review of ACL’s customer relationships showed multiple compliance issues:
- Inadequate Policies and Procedures: ACL’s systems and controls were not sufficient to meet AML rule requirements.
- Weak Risk Assessments: ACL failed to properly assess AML risks and assign accurate risk ratings for many customers.
- Poor Record Keeping: ACL did not maintain proper records of customer due diligence (CDD) checks for some customers.
- Inconsistent Monitoring: The company didn’t frequently review customer CDD information, especially for high-risk clients.
- Lack of Transaction Monitoring: ACL did not properly track customer deposits and withdrawals to ensure they aligned with customer profiles.
- Failure to Detect Suspicious Activities: Systems to monitor and identify potentially suspicious transactions were inadequate.
Cooperation and Penalty Reduction
The FSRA’s investigation found no cases of actual money laundering linked to ACL’s failures. ACL cooperated fully with the investigation and took steps to fix the identified issues. By agreeing to settle early and not contesting the FSRA’s findings, ACL received a 20% reduction in its fine. Without the discount, the penalty would have been $630,000 (Dh2,313,675).
CEO’s Statement on AML Compliance
Emmanuel Givanakis, the CEO of the FSRA, emphasized the importance of AML compliance, saying:
“The FSRA is dedicated to combating money laundering and terrorism financing. All financial firms in ADGM must have strong AML systems to address financial crime risks. We will continue enforcing strict AML regulations.”
