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20 May 2015, 12:05 pm

DFSA Fines United Investment Bank Limited

The Dubai Financial Services Authority (DFSA) has imposed a fine of USD 56,000 (AED 205,800) on United Investment Bank Limited (UIB).

The fine was imposed following a DFSA investigation which found that, from April to July 2014, UIB contravened a number of the DFSA's Rules, dealing with systems and controls to prevent money laundering (Anti-Money Laundering (AML) Rules). In particular, UIB:

  • did not take sufficient steps to identify and assess the money laundering risk to which its business was exposed;
  • established a business relationship with customers where the ownership or control arrangements of the customers prevented UIB from identifying one or more of the customers' beneficial owners;
  • failed to obtain properly certified documents verifying the identity of customers;
  • failed to properly document adequate information on the purpose and intended nature of its business relationships with customers;
  • failed to properly document its understanding of its customers' sources of funds and wealth; and
  • did not undertake sufficient due diligence on customers which UIB itself had identified as being high risk.

As well as imposing the fine, the DFSA directed UIB to implement a plan to address the problems with its AML systems and controls and engage a suitably experienced and independent third party to oversee UIB's take-on of new clients.

It is not alleged that any money laundering took place.

UIB and its senior management, including its SEO, have accepted responsibility for the contraventions and have cooperated fully with the DFSA to resolve the shortcomings in UIB's AML systems and controls.

UIB agreed to settle the matter following the conclusion of the investigation and the fine was imposed by way of a Decision Notice agreed with UIB. The DFSA therefore reduced the fine by 20% under the DFSA's policy for early settlement. Were it not for this discount, the fine imposed on UIB would have been USD 70,000 (AED 257,250).

Mr Ian Johnston, Chief Executive of the DFSA said: "Firms in the DIFC must conduct proper due diligence on clients and have effective systems and controls to prevent opportunities for money laundering. The DFSA will take appropriate action against any person who does not comply with the DFSA's AML Rules."

A copy of the DFSA's Decision Notice can be found in the Public Register on the DFSA website under Regulatory Actions: Your-Resources/Public-Register#Regulatory-Actions


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