UAE Payment Platform Pyypl Ltd Fined for Anti-Money Laundering Violations

The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has imposed a fine of $486,000 (Dh1.784 million) on money service provider Pyypl Ltd (Pyypl). The penalty comes as a consequence of the company’s failure to comply with anti-money laundering (AML) requirements.

Inadequacy in Compliance and Scope of Operation

The FSRA states that Pyypl’s AML compliance was deemed inadequate. Moreover, the company acted outside the remit of its Financial Services Permission. Emmanuel Givanakis, CEO, FSRA, emphasized the Authority’s commitment to proactive measures to ensure that regulated entities maintain high standards to combat financial crime and money laundering. He further warned that the FSRA will not hesitate to take stringent action to ensure total compliance with AML requirements in the ADGM.

Tougher AML Regulations in UAE

UAE regulators have been tightening rules and regulations surrounding AML and penalizing banks and exchange houses for violations. The UAE Central Bank has also imposed penalties on financial institutions for non-compliance with AML and counter-financing of terrorism measures.

Pyypl’s Failure in Compliance

The FSRA found that Pyypl failed to establish and maintain adequate AML systems and controls. The company did not keep its AML business risk assessment up to date. There were also lapses in carrying out required AML risk assessments and due diligence on its customers. This includes failing to assess the expected payment volumes of its customers, assess and consider all of its products when undertaking customer AML risk assessments, and verify its customers’ residential addresses when conducting due diligence.

Moreover, Pyypl’s AML policies, procedures, systems, and controls were found to be inadequate and ineffective in complying with AML requirements. This includes monitoring and detecting suspicious activity or transactions.

Unauthorized Insurance Intermediation

The ADGM investigation discovered that Pyypl had facilitated its customers to purchase insurance contracts from third-party providers through its application. This activity was conducted without the appropriate authorization, signifying a breach of regulations.

Penalty Discount for Non-Dispute

Pyypl agreed not to dispute the findings, resulting in a 20 per cent discount on the financial penalty. Had the company not agreed to this, the FSRA would have imposed a financial penalty of $607,500 (Dh2.231 million).