As part of enforcing strict money laundering rules in the UAE, Abu Dhabi Global Market’s Financial Services Regulatory Authority (FSRA) has imposed a penalty of $360,000 (AED1.32 million) on Wise Nuqud Limited for contravening several Anti Money Laundering (AML) requirements.
Wise, registered with the ADGM since 26 May 2019, is a licenced money service provider. Over the period from 25 July 2019 to around 22 September 2021, the FSRA found that Wise did not establish and maintain adequate systems and controls to ensure full compliance with its AML obligations.
Wise provides payment services to both personal and small business customers and its primary business is the provision of cross-border money transfers for nearly 15,000 personal and small business customers.
Among the various contravention, FSRA decides that Wise did not identify and verify the source of funds (SOF) and the source of wealth (SOW). As part of the Enhanced Customer Due Diligence (EDD) it identified certain categories of customers as high risk, but still processed the transactions. Wise had instead carried out SOF and SOW checks only when the customers’ account met a specified payment threshold (and after it had already established a business relationship with those customers).
Wise also did not obtain proper approval of senior management to establish business relationships with customers it identified as high risk. Also, the customer’s nationality was not considered as part of its risk-based assessment. It also did not obtain and consider adequate information on the intended nature of business for some customers, which meant it did not identify and assess the expected volume of business for those customers as part of the customer risk assessment and customer due diligence (CDD).
The regulator found that Wise contravened AML Rule 8.4.1(c), Rule 8.4.1(e), Rule 7.1.1(3)(d) and Rules 7.1.1(3)(b) and 8.3.1(1)(c).
Emmanuel Givanakis, Chief Executive Officer of the FSRA, said: “The FSRA actively supports the national AML/CFT agenda and maintains a robust and comprehensive supervisory framework and enforcement regime in these areas in ADGM.
“The FSRA is committed to ensuring that all regulated entities maintain high standards to address money laundering risks and, where appropriate, the FSRA will take strong action to ensure firms comply fully with the anti-money laundering requirements in ADGM.”
The FSRA said its review did not identify any instances of actual money laundering resulting from Wise’s AML systems and control failures. Also, the senior management cooperated fully with the FSRA’s enquiries and have undertaken substantial steps to remediate each of the issues identified. Wise received a 20 percent discount on the imposed penalty $450,000 (AED 1.65 million) for not disputing the FSRA’s findings and agreeing to settle as soon as possible.
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