Monday, September 26, 2022

UAE’s Free Zone Regulator FSRA Fines Wise $360k for Gaps in AML System

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The Financial Services Regulatory Authority (FSRA), the market supervisor of the United Arab Emirates’ (UAE) Abu Dhabi Global Markets, one of the country’s international financial centres and free trade zones, has fined Wise Nuqud $360,000.

Wise Nuqud is the local subsidiary of London-based financial technology company, Wise, formerly known as TransferWise.

The FSRA said it issued the fine because Wise Nuqud breached its anti-money laundering (AML) requirements, Reuters reports.

According to the outlet, the free zone regulator discovered that the international payment processor failed to put adequate AML systems and controls in place.

Although the FSRA said it has not discovered any actual money laundering taking place due to the identified gaps, the regulator pointed out that Wise’s AML systems could not ensure full compliance with its requirements.

More on the AML GapsAdditionally, the FSRA explained that Wise Nuqud jettisoned its obligation of checking for a customer’s nationality and for the source of income when a customer is considered high risk.

The FSRA said it would have fined Wise Nuqud $450,000, but the company did not dispute its findings and, therefore, qualified for a 20% discount.

Meanwhile, Wise told Reuters that the company takes its AML obligations with the utmost priority and will continue to improve its AML systems to the highest standards.

On top of that, the company emphasized that no actual instance of financial impropriety was found by the FSRA.

The FSRA on its part noted that Wise has taken ‘substantial steps’ to correct the areas of lapses it identified.

Meanwhile, the Hong Kong Monetary Authority announced last week that it has slammed a fine of HK$6 million (US$764,670) on the Hong Kong branch of Commerzbank AG, a German universal bank.

The central banking authority said the fine was for the bank’s breach of some provisions of the country’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance.

The Financial Services Regulatory Authority (FSRA), the market supervisor of the United Arab Emirates’ (UAE) Abu Dhabi Global Markets, one of the country’s international financial centres and free trade zones, has fined Wise Nuqud $360,000.

Wise Nuqud is the local subsidiary of London-based financial technology company, Wise, formerly known as TransferWise.

The FSRA said it issued the fine because Wise Nuqud breached its anti-money laundering (AML) requirements, Reuters reports.

According to the outlet, the free zone regulator discovered that the international payment processor failed to put adequate AML systems and controls in place.

Although the FSRA said it has not discovered any actual money laundering taking place due to the identified gaps, the regulator pointed out that Wise’s AML systems could not ensure full compliance with its requirements.

More on the AML GapsAdditionally, the FSRA explained that Wise Nuqud jettisoned its obligation of checking for a customer’s nationality and for the source of income when a customer is considered high risk.

The FSRA said it would have fined Wise Nuqud $450,000, but the company did not dispute its findings and, therefore, qualified for a 20% discount.

Meanwhile, Wise told Reuters that the company takes its AML obligations with the utmost priority and will continue to improve its AML systems to the highest standards.

On top of that, the company emphasized that no actual instance of financial impropriety was found by the FSRA.

The FSRA on its part noted that Wise has taken ‘substantial steps’ to correct the areas of lapses it identified.

Meanwhile, the Hong Kong Monetary Authority announced last week that it has slammed a fine of HK$6 million (US$764,670) on the Hong Kong branch of Commerzbank AG, a German universal bank.

The central banking authority said the fine was for the bank’s breach of some provisions of the country’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance.

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