Abu Dhabi's ADGM fines 23 entities for breaching financial regulations

Capital's financial free zone imposes penalties amounting to more than $166,000

The ADGM maintains a stringent oversight of companies operating in its jurisdiction. Victor Besa / The National

Abu Dhabi's financial free zone ADGM has fined 23 entities a total of Dh610,000 ($166,099) for breaching foreign account tax compliance regulations and reporting standards.

The entities were fined by the Financial Services Regulatory Authority of the ADGM, which has been cracking down on violations.

The breaches included failure to adhere to due diligence procedures and to report information in a complete and accurate manner, an ADGM statement on Monday said. Some failed to submit required annual information returns and collect valid self-certification.

“These enforcement outcomes reflect the FSRA’s firm support for the UAE’s commitment to financial transparency and alignment with global commitments to information exchange,” said Emmanuel Givanakis, chief executive of the FSRA.

“We are committed to identifying and addressing practices that do not meet our commitment to combat tax evasion through implementing robust and effective regulations in line with leading global standards of compliance and reporting responsibility."

The intergovernmental arrangements entered into by the UAE enhance global tax transparency by enabling the automatic exchange of financial account data between jurisdictions, the ADGM said.

“The regulations implement international frameworks that require reporting entities to collect and report information on foreign account holders to help combat international tax evasion,” it added.

The ADGM, which opened in 2015, is home to international banks, insurance houses, global asset managers as well as financial technology and cryptocurrency exchanges. It maintains a stringent oversight of companies operating within its jurisdiction and has fined other groups previously for various breaches.

In April, ADGM regulators fined virtual asset trading platform Hayvn Group and its related entities a total of $12.45 million for "serious" rules breaches, while also banning its former chief executive from conducting business in the emirate.

A fine totalling $8.85 million was levied by the FSRA, while ADGM's Registration Authority (RA) imposed penalties of $3.6 million, the financial free zone said at the time.

In addition, Hayvn founder and former chief executive Christopher Flinos was fined $750,000 and barred from conducting financial services business in the ADGM.

Last year, the ADGM fined Sarwa Digital Wealth (Capital) $122,500 for breaching rules; Baker Tilly $62,500 for auditing failures; and six financial institutions more than $46,000 for contraventions in reporting.

Before then, it also levied a $486,000 penalty on FinTech company Pyppl for breaking anti-money laundering rules and hit KPMG Lower Gulf with a $30,000 fine for breaching auditing regulations.